Chinese companies have received another warning over their enthusiasm for foreign buyouts with the head of China’s foreign exchange regulator calling on them to invest “carefully”, according to an official state newspaper on Monday.

“Overseas mergers and acquisitions can sometimes resemble a rose with thorns, you must be careful and you must do your due diligence,” Pan Gongsheng, the head of the State Administration of Foreign Exchange (SAFE) and a vice governor of the People’s Bank of China (PBOC), told Shanghai Securities News, according to news agency Reuters.

“These deals can be like clasping a handful of sand at the beach, it looks like you’ve got it in your grasp but at the last moment it slips through your fingers,” he added.

Pan’s comments come shortly after PBOC Governor Zhou Xiaochuan, delivered remarks in a similar vein at this month’s National People’s Congress, accusing some domestic investors of expending capital overseas “blindly” and in a rushed fashion.

“Some of this outbound investment was not in line with our own policies and had no real gain for China,” he contended.

Part of the motivation for curbing capital outflows is as a response to concerns that the exodus is exerting too much downward pressure on the value of the Chinese currency, the renminbi, which has dropped by around 10 percent against the U.S. dollar over the past two years.

Ongoing and increasingly aggressive attempts by Chinese authorities to quash the pace and volume of capital flight from the country are now beginning to bear fruit, according to the most recent data from China’s ministry of Commerce.

The figures show that non-financial outbound investment dropped 52.8 percent on an annual basis to February 2017 to hit the lowest level in 17 months. Particularly hit have been investments into foreign property, sports and entertainment targets – all areas which have been singled out by officials as industries where Chinese acquirers may not be investing “for the best motivations”, in the words of the PBOC’s Zhou, echoed by Pan on Monday.

“Last year Chinese firms bought lots of football clubs overseas. If these purchases help improve the standard of Chinese football, then I think that’s a good thing,” Pan opined.

“But is that what’s really happening? A lot of Chinese companies already have high levels of debt and then borrow another large sum to make overseas purchases. Others pretend to be investing but are actually just moving their assets,” he asserted.

After a notable jump in cross-border acquisitions out of China in 2015, last year also saw intense levels of activity with the volume of Chinese acquisitions growing by over 30 percent into the U.S., 215 percent into the U.K. and almost 250 percent into Germany, according to research from M&A advisory firm, Livingstone.

Despite the apparent pullback and ongoing pressures for further caution, advisors at Livingstone see continued growth in outbound acquisitions, tempered by political dynamics in the target countries.

“Transaction flow between China and Europe is expected to grow even stronger, as the relationship between the U.S. and China is increasingly stressed by announcements from the Trump administration,” said Baoshan Bao, managing director of Livingstone China, in the company’s latest report looking at global M&A trends.

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