FDI changes draw praise, spark confusion

November 14, 2014 | BY

clpstaff

Proposed amendments to China's Foreign Investment Industrial Guidance Catalogue have eased restrictions on industries including e-commerce, manufacturing and aviation, but have drawn questions on how they will be implemented

The most recent draft amendments to China's guidelines for foreign investment have eased restrictions on overseas companies across industries including e-commerce, manufacturing and aviation, but sparked confusion on how the process will play out.

The proposed changes to the Foreign Investment Industrial Guidance Catalogue (Catalogue) “reflect the direction in which foreign access control is headed, but the concern lies in how the ministries in charge will regulate and approve in practice,” said Michael Tan of Taylor Wessing.

For instance, while the Catalogue makes no mention of the current 50% foreign-investment limit in e-commerce, existing telecommunication regulations categorising the sector as a value-added service say that foreign ownership cannot exceed 50%.

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