China remains on a U.S. buying spree, but it's blocking deals with Hollywood as Beijing tries to stop money from gushing out of the country.
Big Chinese companies, most of which are directed by Beijing to one degree or another, snapped up $45.6 billion worth of U.S. companies, technology and other property in 2016, triple the year before, accordingly to economic analysis firm Rhodium Group. But increasingly, individual Chinese firms have to prove to their regulators that they're not just trying to sneak capital out of the country into safer assets overseas.
"The government approves deals that are core to the business of the Chinese firm — to make sure they are not disguising capital flight as a legitimate" acquisition, said Evan Medeiros, managing director and Asia practice head at Eurasia Group, a consulting firm. "They are not targeting entertainment companies per se."
China cutting back on investment overseas
Source: Exante Data China Flow Analytics
Last week The Wall Street Journal, citing sources, said that talks between American studio giant MGM and several Chinese companies broke down late last year. The newspaper also said that capital controls have prevented a $1 billion acquisition of Dick Clark Productions by Chinese real estate conglomerate Dalian Wanda. Back in 2012, Wanda acquired AMC Entertainment for about $2.6 billion.
Asked for comment by CNBC, MGM referred to the Journal's report, in which a spokeswoman said, "MGM is in the strongest position ever and is not for sale."
Eldridge Industries, currently the owner of Dick Clark, declined CNBC's request for comment, while Dalian Wanda did not respond to a request.
Other "soft" acquisitions are finding themselves held up as well. Reuters reported Monday that China's sports ministry warned private Chinese investors to follow national rules on investment in foreign soccer clubs — where Chinese interests have sent more than $3 billion over the past year or so.