China to tighten control on domestic firms' foreign investment: WSJ

(Reuters) - China plans to tighten controls on Chinese companies looking to invest abroad, in an effort to slow a surge of capital fleeing offshore, the Wall Street Journal reported on Friday, citing documents it reviewed and sources familiar with the matter.

The State Council, China’s cabinet, will soon announce a series of measures that would subject many overseas deals to stricter regulatory oversight, the Journal reported.

China’s Commerce Ministry and the top economic planning agency will impose “strict controls” over any foreign acquisition valued at $10 billion or more and on state-owned companies intending to build or invest in properties overseas in a deal valued at $1 billion or more, the WSJ said.

They will also impose stricter control on Chinese companies seeking to invest $1 billion or more in overseas entities that are not related to their core businesses, the newspaper said.

Other overseas transactions affected will be investments in overseas-listed companies that are less than 10 percent of those firms’ total equity, direct investments made by limited partnerships and Chinese capital trying to participate in the delisting of overseas-listed Chinese companies, the WSJ said.

The State Council of China was not immediately available to comment.

Reporting by Vishaka George in Bengaluru; Editing by Savio D’Souza