Premier Li Proposes to Slash Restricted Foreign Investment Projects by Half
17 March 2015
China pledges to halve the number of industries in which foreign investment is restricted and actively explore pre-establishment national treatment plus a negative list management approach, according to the Government work report delivered by Premier Li Keqiang.
National Development and Reform Commission and the Ministry of Commerce sought public comment on the revised draft of the Catalogue for the Guidance of Foreign Investment Industries last November, intending to substantially reduce the list of restricted industries of foreign investment, from the original 79 types to 35.
According to the revised draft Catalogue, the types of industries to be removed from the restricted category mainly involve steel, ethylene, oil refining, paper, coal chemical equipment, automotive electronics and famous liquor. At the same time, encouraged foreign investment projects are in the field of modern agriculture, high technology, advanced manufacturing, energy-saving and environmental protection, new energy and modern service industries.
China introduced the Catalogue in 1995 by means of regulations announcing lists of encouraged, restricted, prohibited categories of foreign investment industries in China. Since then, the Catalogue has been revised five times according to China's economic and social development. The upcoming 6th edition will feature the largest number of cancellations under restricted category to date.
The decision by the Third Plenary Session of the 18th CCP Central Committee has clearly set out the implementation of a unified market access system, unified domestic and foreign investment laws and regulations, as well as the exploration of offering pre-establishment national treatment plus a negative list management approach for foreign investment.
Since the launch of the Shanghai Pilot Free Trade Zone in September 2013, the negative list approach has been hailed as a core management model widely implemented in the FTZ. Foreign investment access special management measures in the FTZ in 2014 were reduced by one-fourth from previous year. The new version of the negative list of this year in the pipeline will further enhance the openness and transparency of the FTZ’s foreign investment regime.
Statistics show that in 2014, China's actual use of foreign direct investment (FDI) was in the amount of US$119.6 billion, up 1.7% year on year, higher than the major economies of the United States, European Union, Russia and Brazil and ranking first among the developing countries for 23 consecutive years. But in the recent past, the exit of some manufacturing companies from China has also caused market concern.
- Mainland China
- Mainland China