SHANGHAI (Reuters) - A recent crackdown by China on overseas investments has been assumed to be mainly focused on high-profile acquisitions of things like hotels and football teams around the world.

FILE PHOTO: A ball is seen on a roulette wheel in front of slot machines at Gaming Expo Asia in Macau May 22, 2012. REUTERS/Bobby Yip/File Photo

However, Chinese regulators also appear to have their eyes on two other lower-profile industries: gambling and sex.

China’s cabinet on Friday issued rules on acquisitions abroad for the first time, possibly signaling a further slowing of the flood of money that has flowed overseas in recent years.

Investment in property, hotels, entertainment, sports clubs and film industries would be restricted as part of the new guidelines, which the cabinet said were aimed at defusing risks and preventing crime.

But it also said that overseas investments in the gambling and sex sectors, as well as exports of core defense technologies, would be banned as such activities could endanger national interests and security.

The statement did not elaborate on what it meant by the sex and gambling industries, but Chinese businesses have been prolific builders of casinos in countries such as Laos and on the Pacific island of Saipan that are popular with Chinese gamblers. Gambling is banned on the mainland.

Although Beijing began its crackdown on what it calls “irrational” overseas investment at the end of 2016 by tightening control on capital outflows, it had not issued official rules until Friday.

The new rules and heightened scrutiny surrounding foreign investment in China “adds another layer of uncertainty and complexity to Chinese deals,” said Tony Balloon, a partner in law firm Alston & Bird.

“As early numbers indicate, cross-border deal activity among Chinese companies has dropped in the first half of 2017 from the same period last year,” he said.

Thomson Reuters data released this week showed that all outbound mergers and acquisitions from China dropped 42 percent year-on-year as of August 14.

But Chinese acquisitions in countries officially linked to the Belt and Road initiative, a signature foreign policy of President Xi Jinping, totaled $33 billion, surpassing the $31 billion tally for all of 2016, the data showed.

Chinese companies have been on a global buying spree, snapping up football clubs, movie studios and skyscrapers, but they have hit road bumps in recent months thanks to financing restrictions.

“There are profound changes taking place in China and abroad that offer good opportunities for Chinese firms to undertake overseas investment but also carry many risks and challenges,” the State Council said in the statement.

It said investment that promoted the Belt and Road initiative, and in areas such as technology and manufacturing, would continue to be encouraged but that deals in “sensitive” countries and regions would be restricted.

The state-run Chinese Securities Journal reported on Saturday that companies such as the insurer Ping An 2318.HK601318.SS, Suning Commerce Group Co Ltd 002024.SZ, a retail giant, and the conglomerate Dalian Wanda had responded positively to the new guidelines.

The newspaper quoted Wanda’s chairman, Wang Jianlin, as saying that the company would strengthen its due diligence procedures.

The three companies have been among corporations whose overseas deal-making have been hit by Beijing's crackdown. Other companies include HNA Group, Anbang Insurance [ANBANG.UL], Fosun International 0656.HK and Zhejiang Luosen, which was behind the purchase of the A.C. Milan football club.