China probes international investments
The government of China seeks to reduce local investments on international casino developments.
China.- Chinese investments on international gaming projects would be investigated and reduced by the national government. Earlier this week, the administration has published new conditions to set overseas investments involving gaming, hotel, entertainment and real estate industries. The regulation seeks to reduce the “irrational” acquisition of foreign assets.
“As with similar notices and guidelines issued in the past, specificity and details are indeed limited,” stated a Monday memo from analysts Jamie Soo and Adrian Chan of brokerage Daiwa Securities Group Inc., as published by GGRAsia. “That said, this newest development does follow a number of new rules and regulations recently introduced that seek to limit, control, or curb capital outflows and cross-border funding.”
Meanwhile, Ben Lee of IGamiX Management and Consulting Ltd revealed to the news outlet: “The guidance could have an enormous impact on all the Chinese companies currently involved in gaming projects all around the world: China State Engineering Corp in the Bahamas with Baha Mar(where they have equity interests); Landing [International Development Ltd] in Jeju Island [South Korea] and London; Greenland [Group] in Jeju; and Guangzhou R&F [Properties Co Ltd] in Incheon[South Korea] with Caesars Entertainment.”
The gaming industry could be the most profitable route “used by high net-worth private citizens and corrupt government officials seeking to circumvent China’s strict currency controls.” Last year the government reported a record-breaking US$816 billion in capital outflows leaving China. Now the government has labelled gaming industry’s investments under the “banned” category.
