CNBC: No sex, No gambling as China Tightens Rules on Foreign Investment

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New rules from Beijing prohibit investments in core military technology and anything that endangers national security, according to a report filed by CNBC Monday.

Also under tight scrutiny, investments in gambling and sex industries as well as film studio deals.     

What is encouraged, however, are investments that fall along the lines of China's "One Belt, One Road" framework, CNBC notes.

"There are profound changes taking place within China and internationally, that offer Chinese companies a good opportunity to invest overseas, but there are also many risks and challenges," the State Council said.

"This probably is not really a new regulation, as such overseas investment like property, hotel and gambling have never been openly encouraged by the Chinese government," wrote Credit Suisse analyst Vincent Chan in a note. "This new regulation is more like a re-statement of policies that have already been implemented for some time, and not likely to create a major shock to the economy."

The impact of the recent crackdown on outflows has been dramatic — outbound deals from China dropped 40 percent to $74 billion in the first half this year, based on Dealogic data.

- Aaron Goldstein,

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