China to set up system to monitor its firms overseas

China's state planner issued guidelines on Tuesday for monitoring the overseas activities of Chinese firms and individuals to prevent tax fraud, money laundering, illegal financing, and activities damaging to the country's reputation.

In a statement on its website, the National Development and Reform Commission (NDRC) warned that the government will record and tally instances of laws and regulations being broken in China or abroad, and offenders would be punished.

The plan is part of efforts to regulate firms' overseas investments and business activities as China's influence in the global economy grows, especially through its Belt and Road initiative.

In addition to illegal activities, the guidelines specifically say actions that “violate international conventions and United Nations resolutions, or that disrupt foreign economic cooperation, adversely impact the Belt and Road initiative, or harm China's reputation”, will be recorded.

The guidelines also focus on monitoring cross-border capital flows by insisting overseas deals are reasonable and disclosures are accurate.