New Investment Catalogue Expected to Liberalize Infrastructure Investment

China's accession to the World Trade Organization is expected to have significant and far-reaching impact upon China's domestic economy and related legal framework. This includes the area of basic infrastructure, of which we've covered many issues in the past year on this page.

Foreign investment in basic infrastructure, like other types of direct foreign investment in the PRC, is governed by and subject to the overall legal framework set out in the Directing of Foreign Investment, Tentative Provisions (the Investment Provisions) and the Foreign Investment Industrial Guidance Catalogue (the Investment Catalogue). This will not change with China's entry into WTO. The State Council first issued the Investment Provisions in 1995, and the State Development Planning Commission (SDPC), the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) are jointly responsible for their implementation.

The Investment Catalogue, first promulgated together with the Investment Provisions in 1995, is revised on a periodic basis by the SDPC in consultation with the State Council. The first revised version of the Investment Catalogue was adopted by the State Council and became effective from January 1 1998. Further to China's accession to the WTO, a new revised version of the Investment Catalogue is expected by the end of December 2001. This version will reflect the specific changes agreed pursuant to the terms of China's accession documents, together with other changes reflecting domestic priorities (such as the development of the western provinces).