Amid increasing cases of State-asset losses seen in overseas projects, the authorities have eventually become determined to hold those responsible to account.

The State-owned Assets Supervision and Administration Commission (SASAC) on Monday issued new regulations to supervise the overseas assets of centrally administered State-owned enterprises (SOEs). The regulations will take effect July 1.

Analysts believe the government-assigned CEOs will no longer be able to walk away scot-free after making failed business decisions, though more detailed rules and actions are expected.

China's overseas investment has risen sharply in recent years. Unfortunately, this has been accompanied by huge losses. Sixty-eight centrally administered SOEs, including Sinopec Group and China National Petroleum Corp., suffered $11.4 billion in losses in their overseas programs during the financial crisis. Last October, China Rail Construction said that it had recorded 4.1 billion yuan ($634 million) in losses in its railways project in Mecca, Saudi Arabia.

Most of these losses were caused by the companies' weak risk prevention measures. A large part of China's overseas investment is in countries with great social and political risks. But some SOEs hastily make blind investments and take no responsibility if the projects fail.

According to the China Business News, beyond local political and cultural factors, the main reason for the losses of China Rail Construction in Saudi Arabia is that the company was so careless it did not negotiate with its partner on contract details. This left room for Saudi Arabia to constantly bring up new requirements leading to the amount of work on the project being significantly higher than the original estimate.

It is by no means the nation's obligation to cover the enterprises' mistakes. Establishing a system of accountability for SOEs' overseas investments is absolutely in the interests of all the people. But at the same time, we should acknowledge that the current SASAC regulations may not be enough to solve all the problems.

The regulations do not give enough detail on how to define SOE responsibility on failed projects and to what extent the SOEs should be responsible for their wrong decisions.

The authorities have more work to do to avoid repeating the obscure accountability systems often seen in China.

For SOE executives, the attention of relevant authorities will first of all serve as a warning to any possible dereliction of duty. SOEs will be more self-restrained and cautious in making overseas investment decision, and follow standard assessment and decision-making procedures.

Business ventures can never be free of risks. China's overseas investment will continue to grow. As long as executives of SOEs follow the proper rules and obey the law, they should not worry about losing their job or even face jail for minor mistakes.

With greater caution from the management and personal devotion into the business, SOEs will fare much better in future overseas expansion.