The National Development and Reform Commission and the Ministry of Commerce promulgated the 2015 Catalog for the Guidance of Industries for Foreign Investment (hereinafter, the "2015 CatalogCatalog") on March 10, 2015.
The 2015 Catalog no longer restricts items such as energy conservation, environmental protection, technologies and safety for which consistent supervision over domestic and foreign investors can be exercised. At the same time, foreign enterprises are encouraged to invest in fields such as modern agriculture, high-new technologies, advanced manufacturing, energy conservation and environmental protection, new energy and the modern service sector, as well as assuming the transfer of high-end industries.
In the amendments to the list of industries which are restricted for foreign investors, attention should be paid to major details as follows:
- In the manufacturing sector, the requirement that the production facilities of millet wine and famous white wine in the beverage manufacturing category shall be controlled by Chinese investors has been eliminated, as well as restrictions for tobacco products, petroleum processing, and pharmaceutical manufacturing industries for a total of 26 provisions. Meanwhile, "Item 8: Publications and Printing (controlled by Chinese investors)," which is removed in the Solicitation for Opinions was re-included, along with additional restrictions on "raw sugar processing."
- The requirement that the development and operation of power grids shall be controlled by Chinese investors in the production and supply of electricity, gas and water category is eliminated.
- Restrictions on railway freight forwarders and automobile import/export companies in the transportation, warehousing and postal services category are eliminated. Meanwhile, "electronic commerce" is no longer restricted in the value-added telecommunications industry.
- The restrictions on the three items in the wholesale and retail category, namely the "direct marketing and mail order business," "online sales," and " distribution (limited to cooperation) of audiovisual products (except for motion pictures)", are lifted with the wholesale or retail of tobacco products placed under the prohibited categories.
- The restrictions on the two items in the finance category, namely "financing, trust and money brokerage companies" and "insurance brokerage companies", are lifted, and the restrictions on the banking industry are described in more detail.
- All restrictions in the real estate category are lifted. This means that the restrictions on "development of an entire block of land (limited to joint venture or cooperation)," "the development and operation of high-end hotels and high-end office buildings and international convention centers" and "companies engaging in secondary real estate market transactions and real estate intermediary or brokerage services" are removed.
- The "Chinese legal affairs consultancy" is included in the prohibited categories, and radio and television reception and TV rating companies are subject to stricter restrictions and shall be controlled by Chinese investors.
- Restrictions on two items in the scientific research, technical services and geological survey category, namely "companies engaging in the inspection, appraisal and certification of imported and exported goods" and "photographic service (including special photographic services such as aerial photography which do not include aerial photogrammetry and are limited to joint ventures), are lifted.
- Two items are added to the education category. Compared with the Solicitation for Opinions, the definition of "led by the Chinese investor" is added, and "kindergarten education" is changed into "pre-school education." It should be noted that higher education institutions were in the encouraged category of in 2011.
- The sanitation and social work categories are added, and medical institutions can be established only via joint venture or cooperation.
- The restriction on the "operation of entertainment premises (limited to joint ventures and cooperation)" in the culture, physical education and entertainment category is removed. In comparison with the Solicitation for Opinions, the requirement of "the production of audiovisual products and electronic publications (controlled by the Chinese investor)" is deleted.
In the amendments to the list of industries which are prohibited for foreign investors,, attention should be paid to major details as follows:
- In the agriculture, forestry, stock-raising and fishing categories, "research and development" is deregulated, while "seed selection and breeding" is prohibited.
- The prohibitions on the "the processing of traditional green tea and special tea (well-known tea or dark tea) in China," "the production of bodiless lacquerware," and "the production of products conducive to cancers, deformity or genetic mutation and long-lasting organic contamination" in the manufacturing category are eliminated with the addition of a prohibition against "the production of nuclear fuels"
- The wholesale and retail category is added and the category of "wholesale and retail of cigarette leaves or rolls, redried leaf tobacco and other tobacco products" is changed from a restricted category to a prohibited category.
- In the leasing and commercial services categories, the "Chinese legal affairs consultancy (except for providing information relating to impact from China's legal environment)" is added as a prohibited item.
- Some sub-items, such as cartography and geological survey, are added in the category of scientific research and technical services.
- The "auction of cultural artifacts," "cultural artifact stores," and "online publishing services" are added as prohibited items in the culture, physical education and entertainment category.
- It is indicated in the footnote that the State Council will no longer release industry policies involving foreign investment access and will regulate foreign access matters via "investment agreements."
In the amendments to the list of industries whose foreign investment is encouraged, attention should be paid to major details as follows:
- "The formation and cultivation of quality seeds for forests (bamboos) and the cultivation of new species for polyploid trees" is no longer an encouraged item in the agriculture, forestry, stock-raising and fishing category.
- The cooperation restriction on accounting and auditing services in the leasing and commercial services category is lifted. However, the nationality restriction on the chief partner is added, and the sub-category of human resource services is eliminated.
- The high educational institution in the education category is changed from an encouraged item to a restricted item.
- "Old-age retirement home" is added as a sub-item in the sanitation and social work category.
- The restriction that the operation of performance premises in the culture, physical education and entertainment category should be "controlled by Chinese investors" is lifted.
The 2015 Catalog came into force on April 10, 2015. The Catalog for Industries Invested by Foreign Investors (Amended in 2011) promulgated by the National Development and Reform Commission on December 24, 2011 also became void on the same date.