National Development and Reform Commission and Ministry of Commerce, Amendment Draft for the «Foreign Investment Industrial Guidance Catalogue»

The current revision of the Catalogue mainly focuses on expanding relaxation and structural adjustment. It does not make any major changes to the items in the encouraged category, continuing to encourage foreign investment in sectors such as modern agriculture, advanced manufacturing, high and new technology, energy saving, environmental protection and modern services; encourages transformation and upgrading of traditional industries; and promotes the use of new technologies, new processes, new materials and new equipment.

Issued: December 7 2016

Main contents: The Draft reduces the 93 restrictive measures of the 2015 version of the Catalogue (including 19 in the encouraged category with shareholding percentage requirements, 38 in the restricted category and 36 in the prohibited category) to 62. In the service industry, there is major relaxation in sectors such as passenger transport by road, ocean shipping tallying, credit check and rating services. In manufacturing, there is major relaxation in the access restrictions in production and manufacturing sectors such as rail transport equipment, automotive electronics and batteries for alternative energy vehicles, motorcycles, edible oils, further processing of corn, fuel ethanol. In mining, there is major relaxation in the access restrictions on foreign investment in sectors such as non-conventional oil and gas, precious metals and lithium ores.

The Draft consolidates the items in the encouraged category with shareholding percentage requirements, and items in the restricted and prohibited categories to form the special administrative measures for access of foreign investments (the negative list for foreign investment access).

In line with the principle of consistent administration of domestic and foreign investments, 11 items in the prohibited category are not listed any more, for example, construction and operation of large theme parks, construction of golf courses and villas, projects that jeopardize the safety and efficient use of military facilities, gaming industry and sex industry.

The current revision of the Catalogue mainly focuses on expanding relaxation and structural adjustment. It does not make any major changes to the items in the encouraged category, continuing to encourage foreign investment in sectors such as modern agriculture, advanced manufacturing, high and new technology, energy saving, environmental protection and modern services; encourages transformation and upgrading of traditional industries; and promotes the use of new technologies, new processes, new materials and new equipment.