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New program to boost overseas investment plans

By Chen Yang (Global Times)

08:31, August 10, 2012

China's top economic planner said Thursday that it will launch a trial program to simplify approval procedures for outbound investment activities by private companies, a move to encourage them to expand abroad amid the global downturn.

For resource investment projects involving less than $300 million or non-resource ones of below $100 million, private companies in certain cities will not be required to submit application reports. Instead they will only need to fill in certain forms, the National Development and Reform Commission (NDRC) said in a statement, without offering specific details.

The trial program is a follow-up to a guideline released by the State Council in July encouraging private companies to invest overseas in key areas such as resources and advanced manufacturing. The guideline also called for domestic banks to provide private companies with credit support, as well as issue yuan-denominated bonds overseas.

The guideline was the first of its kind, and came amid a gradual increase of overseas investment activities by private companies.

Of a total of $65.1 billion in outbound direct investment from China in 2011, about 44 percent came from private companies, according to the NDRC.

"Many private companies choose mergers and acquisitions to expand overseas, as the eurozone debt crisis has offered them opportunities to acquire cash-strapped foreign companies at lower prices," Feng Pengcheng, a professor at the University of International Business and Economics, told the Global Times.

Some experts said the guideline lacks details, and that more should be done to simplify approval procedures and facilitate private companies' investment activities.

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