State Council, Several Opinions on Further Improving the Work on the Use of Foreign Investment

(iii) Multinational corporations are encouraged to set up functional organisations such as regional headquarters, research and development centres, procurement centres, financial management centres, settlement centres, and cost and profit accounting centres in China. Qualified foreign-invested research and development centres that truly need to import articles for scientific and technological development shall be exempted from import duty and value-added tax and consumption tax for the import stage before Dec 31 2010 (Article 6).

(iv) Foreign investors are encouraged to engage in labour-intensive industries that fulfil the requirements of environmental protection in the central and western regions (Article 8).

(v) Foreign investors are encouraged to participate in the reform, consolidation and re-organisation of domestic enterprises by way of equity participation and mergers and acquisitions. The attraction of domestic and overseas strategic investors by A-share listed companies is supported, and participation in domestic securities investments and enterprise mergers and acquisitions by foreign investors shall be regulated. Anti-monopoly examination shall be conducted in accordance with the law, and the establishment of a system for security examination of mergers and acquisitions by foreign investors shall be accelerated (Article 12).

(vi) Foreign investment in the establishment of venture investment enterprises shall be encouraged, private equity investment funds shall be actively utilised and the exit mechanism shall be improved (Article 14).

(vii) The public offering of shares, issue of enterprise bonds and medium-term notes in China by qualified foreign-invested enterprises shall be supported, and the scope of overseas entities eligible for issuing renminbi bonds in China shall gradually be expanded (Article 15).

(viii) Projects that fall under the encouraged and permitted categories specified in the Catalogue with a total investment amount (including capital increase) of less than US$300 million shall be checked and approved by the relevant departments of local governments, unless they are required to be checked and approved by the relevant departments of the State Council as stipulated by the Catalogue of Investment Projects Subject to Check and Approval by the Government. Except where laws and regulations expressly stipulate that a project shall be examined and approved by the relevant departments of the State Council, the said departments may delegate the examination and approval to local governments provided that regulation is strengthened. The establishment of foreign-invested enterprises in the service sector (except financial and telecommunications services) shall be examined and approved by local governments in accordance with relevant provisions (Article 16).