Opening up to foreign investment

December 18, 2008 | BY

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New sectors are expected to open in 2009

Last year, regulatory changes were made in sectors such as banking, franchising, advertising, securities, telecoms and aviation; all these industries then experienced rapid development. In the year ahead, further expansion will take place as a result of the expected regulatory steps, although the weak economy means a cautious approach is needed. These are the likely developments:

Advertising

· The Provisions for the Administration of Foreign-invested Advertising (外商投资广告企业管理规定) will encourage more foreign-invested advertising companies to enter the PRC

Aviation

· Direct flights between the mainland and Taiwan will further enhance the industry

· Sixteen terminals for passenger charter flights will be opened in Chengdu, Chongqing and Shenzhen

Banking

· Circulars 50 and 51 will encourage more inbound private equity investments

· To meet the aim of making Beijing a worldwide financial centre, the banking sector will be opened further

· Chinese banks should make more provisions on bad debt to guard against the weakening economy

Insurance

· The draft amendment of the PRC Insurance Law, if passed, will extend applications of insurance funds, improve market exit mechanisms for insurance companies, and provide provisions on the cancellation and bankruptcy of insurance companies

Franchising

· The 2008 Olympic Games has laid the foundation for the franchising business in China – more such business will be attracted to the country

Telecoms

· 3G mobile phone licences will be issued early in 2009

· China Mobile will get the licence to operate TD-SCDMA (a system based on homegrown technology), China Unicom will get the licence for WCDMA and China Telecom will be awarded the CDMA 2000 licence

Securities

· More foreign securities companies will follow CLSA's example of establishing a Sino-foreign securities joint venture


(This article is part of the New directions for China in 2009 special feature)

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