China's M&A curb could yet benefit China Inc

China’s new rule banning irrational overseas acquisitions is set to hurt private companies hoping to diversify their businesses. But that may not necessarily be a bad thing.
<i>Dalian Wanda is yet to find success with its purchase of Legendary Entertainment, highlighted by the disappointing box office of The Great Wall.</i>
<i>Dalian Wanda is yet to find success with its purchase of Legendary Entertainment, highlighted by the disappointing box office of The Great Wall.</i>

China’s massive overseas spending spree is set to end after Beijing unveiled new guidelines last week, dashing any hopes the country's business community may have had to acquire new income streams from abroad and move money offshore.

But every cloud is supposed to have a silver lining and in this case it could be that the new rules help to concentrate Chinese business minds by fostering more innovation and encouraging organisational efficiencies.

The National Development and Reform Commission said it will restrict outbound investments in a range of sectors including real estate, hotels, entertainment and sports, in the process signalling that Beijing wants to curb capital...

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