Out-Law Guide 1 min. read
22 Dec 2011, 9:12 am
The Foreign Investment Industry Guidance Catalogue is a document issued by China's National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) which governs foreign investment in Chinese companies. The Catalogue classifies foreign direct investment in various business activities as encouraged, restricted, prohibited or permitted. Activities not listed are, in the absence of other rules to the contrary, considered to be permitted to foreign investment.
The different categories are:
The NDRC and MOFCOM have proposed considerable revisions to the Catalogue. The new Catalogue will impact all new foreign investments in China over the next few years. The changes reflect China's current emphasis on high technology, renewable energy, environmental sustainability, value-added manufacturing and enhanced human resources.
The revised Catalogue lists new encouraged and permitted industries. At the same time it raises standards for many encouraged industries and reduced others to mere permitted status. There is comparatively less change to the list of the most sensitive prohibited industries, although even here there are some interesting additions and deletions.
This guide lists some of the potentially more broadly interesting changes.
Newly encouraged activities
New additions to the list of encouraged activities are:
Newly permitted activities
Activities which now fall into the permitted category, having previously been listed as restricted or prohibited, include:
Newly prohibited areas
Foreign investment is now prohibited for the following activities: