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The National Development and Reform Commission (NDRC) recently issued a notice stipulating that domestic firms must provide project information reports before carrying out overseas acquisition and bidding programs.
The circular stipulates domestic enterprises submit the project information reports before signing binding agreements, offering binding price quotations or submitting applications to the host country's authorities.
The new rules are designed to encourage domestic companies to combine national strategic planning, enterprise development strategies and their own strengths to prevent investment risk.
Therefore, the reports should illuminate the general situation of the investors, the project's investment background, acquisition or bidding goals, external work and due diligence investigations, basic plans and schedules of acquisition and bidding.
The NDRC will review the reports and reply with a warning if there are any major negative considerations.
The notice also reminds domestic financial institutions to provide financial support based on realistic risk assessment, and not to issue loans to projects which violate the regulations.
Enterprises that fail to comply with the new requirement will be punished in accordance with situation.
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