October 25, 2018 / 12:05 AM / 10 months ago

China tightening scrutiny of offshore investment using state assets: paper

Chinese Finance Minister Liu Kun attends an interview with Reuters at the Ministry of Finance in Beijing, China August 23, 2018. REUTERS/Jason Lee

SHANGHAI (Reuters) - China is tightening scrutiny of overseas investments by financial institutions using state-owned assets, intensifying its inspection of shareholders, funding sources and investment targets, the official China Daily reported on Thursday.

The newspaper cited a report by Finance Minister Liu Kun to the leaders of parliament that also said the government was planning a national system to supervise state-owned financial capital.

By the end of 2017, Chinese financial intuitions had invested 18.1 trillion yuan ($2.6 trillion) in overseas institutions including opening offshore branches, an increase of 50 percent over 2013, the newspaper quoted the report as saying.

The calculation included foreign debt held by Chinese financial institutions, the newspaper said.

Chinese financial institutions held state-owned assets worth 241 trillion yuan by 2017, or around 80 percent of the nation’s total financial assets, it said.

The report called for the “further optimization” of the ownership structure of state-owned financial institutions in freely competitive areas, with some in a position to further reduce the state’s share by injecting private funds.

A national regulation on state-owned financial asset management was under discussion, it said.

Reporting by John Ruwitch; Editing by Michael Perry

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