The world's second-largest economy has singled out certain sectors in curbs on outflows of capital.

China, which is trying to curb capital outflows, is cracking down on investment in sectors such as pornography, gambling and “unauthorised core military technology”.

The curbs apply to areas such as “real estate, hotels, entertainment, sport clubs, outdated industries and projects in countries with no diplomatic relations with China, chaotic regions and nations that should be limited by bilateral and multilateral treaties concluded by China”, according to the English language version of a State Council press release.

“The guideline intends to drive the output of China’s products, technology and services, and deepen cooperation with countries involved in the Belt and Road Initiative,” the press release, issued late last week, said.

“In addition, the guideline also prohibits domestic enterprises being involved in overseas investment that may jeopardize China’s national interests and security, including output of unauthorized core military technology and products, gambling, pornography and other prohibited technology and products,” it continued. 

A few years ago, the Communist-run nation relaxed foreign investment rules, encouraging a splurge in overseas investments out of China – at around $200 billion last year (source: CNBC, Dealogic). The outflow has put downward pressure on the renminbi currency. At the same time, the country faces continued worries about the robustness of its financial system and the ratio of debt to GDP by the state, at over 300 per cent, according to some measures.