Why China is cracking down on overseas investment

If one of these projects fails it risks the entire banking system

Big Chinese companies have been on an overseas buying spree in recent years, spending more than US$1.6 trillion scooping up businesses, property and “trophy assets” like football clubs. But a directive from the Central Committee of the Chinese Communist Party puts some of this investment in Australia at risk. The directive specifically restricts outbound investments in real estate, hotels, entertainment, and football clubs.

One of the big reasons for the crackdown is how these investments are funded. China’s financial system is dominated by banks and bank loans are the major source of