China Tightens Rules for State-Owned Firms to Add Foreign Debt

China is making it harder for some state-owned companies to borrow overseas, expanding a campaign to rein in local government debt risks, according to people familiar with the matter.

The National Development and Reform Commission, China’s top economic planning agency, has in recent weeks set tighter criteria, including those for profitability and business scope, for regional-level state-owned enterprises to get additional offshore debt quotas, said the people who requested anonymity discussing private matters.

These SOEs must prove they are profitable and operating a clear core business such as manufacturing or mining so as to secure permission to raise new debt ...