On December 24, 2011, the new version of the Foreign Investment Industrial Guidance Catalogue was jointly issued by the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM). As an implementation of the State Council’s Several Opinion on Further Improving the Work of Utilizing Foreign Investment in 2010, the NDRC and MOFOCM prepared and released a draft of the Catalogue for public comment in April of 2011, and finally adopted it at the end of 2011.
Initially issued in 1995, the Catalogue had undergone five revisions. The Catalogue divides industries into “encouraged,” “restricted” or “prohibited” categories, and the industries not mentioned in the Catalogue are considered a “permitted” category.
Based upon the spirits of the 12th Five Year Plan earlier this year with the aim of shifting the Chinese economy towards a more flexible and balanced mix between manufacturing and consumption, the 2011 Catalogue revolves closely around the theme of accelerating the change in the direction of China’s economic development, and places great emphasis on improving the foreign investment structure and promoting technological innovation, as well as upgrading industries.
Compared to the 2007 version, the 2011 Catalogue brought significant adjustments to China’s industrial policies towards foreign investment, including:
- Industries added to the “encouraged” category: new energy vehicles and its key parts, internet system equipment based on IPv6, venture capital investment, IP services, vocational training, charging station for new energy automobile, etc.;
- Industries removed from the “encouraged” category: automotive vehicle manufacturing, polycrystalline silicon and coal chemical industries, improvement of low and medium yielding field, prospecting and exploitation of submarine flammable ice, production of mass coal chemical industrial products, production of BCG and polio vaccine, etc;
- Industries added into the “restricted” category: construction and operation of large agricultural wholesale markets, construction and management of gas, heat and draining pipe networks for cities with more than 500,000 residents;
- Industries removed from the “restricted” category: establishment of medical institutions, and financial leasing company, auction, gas, heat and draining networks, production of carbonic acid beverage, etc..
The 2011 Catalogue will take effect on January 31, 2012. The 2007 Catalogue continues to apply to the foreign invested enterprises incorporated before that effective date. However, the capital increase, equity transfer or initial public offering in foreign stock exchanges of those enterprises will be subject to the 2011 Catalogue.
- Industrial Guiding Catalogue for Foreign Investment
- Issuing Authority: National Development and Reform Commission and Ministry of Commerce
- Date of Issuance: December 24, 2011 / Effective Date: January 31, 2012.