Consultations closed at the end of April on a redraft of the Foreign Investment Industrial Guidance Catalogue. The catalogue, first introduced in 1995, is issued jointly by the National Development and Reform Commission and the Minisotry of Commerce. It divides industries and sectors into those in which foreign investment is “encouraged”, “restricted” and “prohibited”, and has been revised and updated four times since its launch.
The proposed changes largely reflect the industrial and developmental priorities recently outlined in the 12th five-year plan.
New categories in which foreign investment is proposed to be encouraged include:
- new energy projects, including high-technology battery manufacturing;
- the construction and operation of electric vehicle charging stations and battery-changing stations;
- high-technology glass and optics products;
- venture capital enterprises;
- intellectual property services; and
- vocational training.
Categories which are currently restricted or prohibited, but which are proposed to be included in the encouraged category, include:
- the production of carbonated soft drinks;
- the construction and operation of oil refineries with an annual output of up to eight million tonnes;
- automobile wholesaling, retailing and logistics (however a Chinese party must have a controlling interest in any chain with 30 or more branches which distributes a range of products from more than one supplier);
- medical institutions;
- financial leasing companies;
- the distribution and import of books, newspapers and journals;
- the import of audio-visual products and e-journals; and
- internet music services.
Newly prohibited areas include the operation of domestic express parcel services and – perhaps reflecting the government’s attempts to control the property market – the construction and management of luxury housing.
Foreign investors and Chinese companies in the affected sectors await the publication of the final text of the new catalogue.