China said on Friday it is tightening restrictions on property companies seeking to raise funds offshore, in its latest move to reduce potential financial risks.

The country’s state planner said any new offshore bond issues by real estate firms must be used only to replace medium- and long-term offshore debt maturing in the next year.

“This rule has a powerful regulatory impact,” said Yan Yuejin, a research director with Shanghai-based property services firm E-House China R&D Institute.

“In other words, property developers are now restricted from using overseas debt to repay domestic debt, to replenish liquidity, and to acquire land.”

The National Development and Reform Commission (NDRC) said in a notice that real estate companies also must contain foreign debt risks by holding a “reasonable position” in their foreign exchange reserves.

They should improve information disclosure and specify how they will use the funds raised offshore in their bond prospectus, it added.

The NDRC said the new requirements are aimed at “preventing the possible risks of foreign bond issuance by real estate companies and promoting the stable and healthy development of the real estate market”.

In the first quarter of 2019, Chinese real estate companies issued $47.121 billion of dollar-denominated bonds, the highest level in nearly a year, and up 4.78% from the previous quarter, according to an April report by China Lianhe Credit Rating.

Beijing has already slowed approvals for onshore and offshore bond issuance to curb aggressive bidding for land, after premiums paid spiked in the first quarter.

Chinese regulators have warned of growing risks from the offshore bond market after some real estate issuers applied for bigger quotas than needed for their financing needs.

Last week, the government moved to curb real estate investments through some trust companies by asking them not to provide new financing to real estate firms, according to sources familiar with the matter.

Everbright Trust and Citic Trust, two major trust companies involved in real estate investment, said on Thursday that they had suspended new fund-raising for real estate firms following window guidance from the banking and insurance regulator, according to notices they sent to Reuters.