CHINA: Consultation on revisions to the Foreign Investment Industrial Guidance Catalogue

Wednesday November 19 2014

The National Development and Reform Commission (NDRC) has published a consultation proposing changes to the Foreign Investment Industrial Guidance Catalogue.

The Foreign Investment Industrial Guidance Catalogue classifies industry sectors into encouraged, restricted and prohibited, and any sector not included in the Catalogue is permitted. The Catalogue also identifies sectors and activities for which a Chinese partner is required and for certain circumstances, the minimum shareholding that the Chinese partner must hold.

The proposed revisions will substantially relax foreign investment restrictions in the encouraged sectors, reducing the number of sectors that are subject to foreign ownership restriction from 50 to 15. The previous encouraged industries which are proposed to be opened to 100% foreign ownership relate to automobile electronics, technology for oil exploration, paper production, manufacture of civil airplane and vessels, construction and operation of railway and subway and international maritime transport. The proposals would also add a number of new sectors including investment in senior care institutions, development of clean coal technology, culture and creative industries. The number of restricted sectors is also proposed to be reduced from 79 to 35. Various industries are proposed to be removed from the restricted category and the caps on foreign ownership are to be lifted for some of those industries. The list of prohibited sectors proposed to be reduced and more industries would be opened to foreign investors, such as processing of green tea and other special tea with Chinese traditional techniques.

The consultation is open until 3rd December 2014.

Click on the above link for the consultation (in Chinese).