China has simplified rules to make it easier for domestic companies to invest overseas - in the latest move to slow the rise of its foreign currency reserves and help local firms climb up the global value chain.
Under revised rules published by the Ministry of Commerce, most domestic firms will no longer need government approval prior to their overseas investment, but they must register their investment with the authorities.
But companies investing in "sensitive countries and industries" - which include nations that have no diplomatic ties with China and those under United Nations sanctions - still need government approvals, according to the rules published by the ministry on its website, www.mofcom.gov.cn.
The rules will take effect on Oct. 6.
The Ministry of Commerce, which reviews outbound investment applications from companies owned by the central government, will make decisions within 20 working days, the rules added.
The approval time limit for provincial commerce departments, which review applications from local firms, will be 15 working days.
The latest step is in line with the government's recent reforms to cut red-tape to reduce the government's administrative powers, the ministry said in a statement.
Under the old rules, any foreign investment project worth more than $100 million had to approved by the trade ministry, according to state news agency Xinhua. Overseas investment in the energy and mining sectors also needed to be signed off by authorities.
With the revised rules, deals larger than $1 billion must also be approved by the National Development and Reform Commission, Xinhua said last week.
The government has been encouraging outbound direct investment by local firms to help slow down the rapid buildup of the country's foreign exchange reserves and help improve local firms' competitiveness in the global market.
China's outbound direct investment by non-financial firms hit $90.2 billion in 2013, up 16.8 percent from the previous year. Meanwhile, China attracted $117.6 billion in foreign direct investment (FDI) last year, up 5.3 percent from 2012.
Commerce ministry officials have predicted that China's outbound investment could exceed foreign direct investment sometime in the near future.
