(Yicai Global) July 18 -- China encourages suitable domestic firms to engage in foreign investment and supports market-oriented overseas investment projects that follow commercial principles and international practices, said a spokesman for the National Development and Reform Commission, the country's top economic planner.

More specifically, firms are inspired to invest and participate in construction of projects involved in the nation's One Belt, One Road initiative and those concerning international production capacity agreements, said Yan Pengcheng. In order to guard against foreign investment risks, authorities will focus on irrational purchases in real estate, hotels, studios, entertainment and sports, and advise company decision-makers concerned to be more prudent.

Foreign direct investment in the non-financial sector dropped sharply in the first half of this year, which Yan attributed to a high base value set last year, China's improving economy, greater confidence in domestic investments, increased uncertainties overseas, more prudent investment and authorities' more stringent inspections, which began at the end of last year.

Foreign investment is an important way for Chinese firms to get involved in international economic competition and cooperation and integrate into the global industrial and value chains, Yan added. The NDRC and other regulators will continue to improve their management of money sent overseas in line with requirements set by the State Council, China's cabinet. They hope to facilitate foreign investment while better guarding against risks to ensure sustainable and healthy development in the sector.