China to keep closer eye on firms investing abroad: govt

China plans to tighten up supervision of domestic companies looking to invest overseas, the government said, after some high-profile investments abroad turned sour amid the global economic crisis.

The Ministry of Commerce will require Chinese companies to seek its approval for overseas investment of 100 million dollars or more, according to draft rules published on its website late Wednesday.

Companies will also need the ministry's approval for investments in countries that have no diplomatic relations with Beijing, overseas infrastructure projects or countries and regions with high risks, it said.

Non-central government firms will need approval from provincial branches of the commerce ministry for overseas investments of between 10 million and 100 million dollars.

The same applies for non-central government companies looking to invest in overseas energy and mining companies and real estate development projects of any size, it added.

The new draft rules, which will replace existing rules that came into force in 2004, are aimed to "promote and regulate overseas investments," the ministry said.

The ministry is soliciting public opinion on the draft rules until January 20.

Under existing rules, companies directly controlled by the central government need to apply for the ministry's approval for investments abroad while other firms only need the nods from the its provincial branches.

There were no monetary details of investments that would need approvals in the existing rules.

The move came after a few domestic firms faced severe criticism at home for their investment choices after the global financial crisis led to heavy paper losses, or unrealised losses, on investments that have yet to be cashed in.

China's second biggest insurer, Ping An Insurance Group, has booked such losses of 15.7 billion yuan (2.3 billion dollars) on its investment in embattled European financial group Fortis.

China Investment Corp, the country's 200-billion-dollar sovereign wealth fund, has also suffered hefty paper losses on its investments in Wall Street bank Morgan Stanley and private equity firm Blackstone Group.