China Cracks Down on Overseas Investments, Including Hollywood Film Deals

The decision will hamper companies like the Wanda Group

Wang Jianlin Wanda
Getty Images

A new ordinance from the Chinese government is cracking down on companies with major overseas investments, which will severely limit Chinese involvement in several industries in America — including filmmaking.

The Chinese National Development and Reform Commission — in conjunction with the country’s State Department — released documents on Friday outlining its new suppressive measures. The country will crackdown on Chinese companies involved in “real estate, hotels, studios, entertainment, sports clubs and other overseas investment.”

The decision will hamper companies like the Wanda Group — the biggest Chinese player in Hollywood — which has already run up against restrictions in recent months. The company’s stock dropped 10 percent after the Chinese government looked to curb foreign investment and stop banks from lending money to the juggernaut.

Under the Commission’s section of “limited” industries, Chinese investment in foreign studios will face increased scrutiny moving forward. Deals will need to show “mutual benefit” and outline a “win-win strategy.” The People’s Bank of China is expected by the Commission to limit its lending to Chinese companies looking to grow its Hollywood presence.

Other forms of outside investment will be stunted as well. The Commission filed involvement in the gambling and “sex industry” under its “prohibited” section, saying it “may endanger national interests and national security.”