The PRC Legislative Affairs Office of the State Council, in its circular released on April 1, 2011, published the revised Guiding Catalogue of Foreign Investment (Draft for Comments) (the “Draft Catalogue”). According to related announcements, the Draft Catalogue was initially revised by various foreign investment governing authorities including the Ministry of Commerce (MOFCOM) and the National Development and Reform Commission (NDRC).

Compared to the current version of the catalogue, released in 2007 (the “2007 Catalogue”), the Draft Catalogue mainly contains the following revisions applicable to foreign direct investment market access:  

  • Higher thresholds with respect to technical standard and productivity are required for foreign invested projects. For example, to be categorized as encouraged foreign investment, foreign investment in wind turbine power generation is required to manufacture devices with output of 3 megawatts or more rather than 1.5 megawatt or more as stipulated in the 2007 Catalogue.
  • As shown in the Draft Catalogue, many items under heavy machinery manufacturing industry were removed from the encouraged category. Another item having undergone modification is the manufacturing of automobiles, which is also removed from encouraged categories.
  • Foreign investments in energy saving, clean energy technology and environmental protection are still extremely encouraged. Rather than encouraging general pollution control projects as contained in the 2007 Catalogue, the Draft Catalogue specifies detailed pollution control technologies that are viewed as more needed. As part of a policy encouraging sustainable development in a costefficient manner, comprehensive reuse, recycling and remanufacturing are stressed in the current revisions as China consider them indispensable components of future economic growth.  

As the Draft Catalogue is open for public and internal comments, it may be subject to further modifications before being officially promulgated.

  • State Council’s Circular on Release of the Draft Guiding Catalogue of Foreign Investment for Comments
  • Issuing Authority: PRC Legislative Affairs Office of the State Council
  • Date of Issuance: April 1, 2011 / Effective Date: April 1, 2011