Legislation roundup: Foreign investment catalogue and private bond offerings

FDI

National Development and Reform Commission, Foreign Investment Industrial Guidance Catalogue (Amendment Draft)
国家发展和改革委员会外商投资产业指导目录 (修订稿)

The Catalogue places emphasis on promoting the opening of the manufacturing industry and service industry to foreign investment, and encourages foreign investment in modern agriculture, high and new technology, advanced manufacturing, energy saving and environmental protection, alternate energy sources, the modern service industry, and research and development.

The newly revised Catalogue abolishes the restrictions on foreign investment in sectors such as iron and steel, ethylene, oil refining, coal chemical equipment, feeder rail lines, subways, automotive electronics, lifting machinery, equipment for electricity transmission and transformation, famous and fine white spirits, international maritime transport, finance companies, insurance brokerages, chain stores, and inspection of import and export goods. Foreign investors may establish wholly foreign-owned enterprises for large-scale papermaking. As for alternate fuel vehicles, of the three major core technologies, two, namely electric motors and electronic controls, are completely relaxed whereas batteries still have a 50% shareholding percentage restriction. In the real property development sector, business such as development of large tracts of land, construction and operation of high-end hotels and office buildings, and real property intermediary and brokerage companies have been removed from the restricted category. The restriction preventing foreign investment from exceeding 50% in e-commerce has also been abolished.

See the digest for more details

Further reading
Foreign Investment Industrial Guidance Catalogue (Amended in 2011)
FDI changes draw praise, spark confusion


Capital markets

Securities Association of China, Measures for a Pilot Project for Bonds Privately Offered to Carry Out Mergers and Restructurings
中国证券业协会并购重组私募债券试点办法

To privately offer bonds to carry out mergers and restructurings on the quotation system, the following conditions shall be complied with:

(1) the issuer being a limited liability company or company limited by shares registered in China, but, for the time being, excluding companies listed on the Shanghai and Shenzhen Stock Exchanges;

(2) the proceeds to be used to support merger and restructuring activities, including but not limited to paying the merger/restructuring amount and repaying merger/restructuring loans; and

(3) the offering coupon rate not exceeding four times the benchmark interest rate for bank loans of an equivalent term.

See the digest for more details

Further reading
Tentative Measures for the Regulation of Private Investment Funds
Unifying laws on private investment funds