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Zhou Xiaochuan has defended China’s strict new capital control regime as a “normal” response to “over the top” overseas investments by Chinese companies and individuals.

“Some people [invested offshore] blindly and were in a rush to do so,” the central bank governor said on Friday, at a briefing held on the sidelines of China’s annual parliamentary session. “Some of this outbound investment was not in line with our own policies and had no real gain for China.”

Mr Zhou’s comments marked the first time that he has publicly addressed China’s efforts to rein in overseas investments and slow the renminbi’s fall against the dollar, which accelerated in the second half of last year, write Tom Mitchell and Yuan Yang.

Mr Zhou’s appearance on Friday may also be his last at the National People’s Congress. At 69, he is China’s longest serving central bank governor, having held the post since 2002. It is widely expected that he will finally step down when a Communist party congress, due to be held at the end of this year, marks the formal beginning of President Xi Jinping’s second term in office.

Mr Zhou singled out Chinese overseas investment in “sports, leisure and clubs” for criticism. “Some investment was not [made] for the best motivations,” he said. “So to regulate this, I think it is normal.”

Copyright The Financial Times Limited 2017. All rights reserved.
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