Key Points

  • The original Guideline is an important reference point for governmental departments and local governments when creating local industry policies, investment catalogues and tax policies.
  • New Guideline introduced to amend certain sections of the original Guideline.
  • New Guideline adds, revises or removes a number of clauses relating to encouraged, restricted and eliminated catalogues.

Background

On 16 February 2013, the National Development and Reform Commission issued the Notice of Amendments to Industry Adjustment Guideline (2011 Version) (the "New Guideline"), effective as of 1 May 2013. The New Guideline amends, adds or revokes various clauses relating to the three catalogues, (encouraged, restricted and eliminated) established in the Industry Adjustment Guideline (the "Guideline").

Summary

Changes to the Catalogues

The additions under the ncouraged catalogue are closely related to clean energy and public security.

Under "new energy", clauses have been added to the technical development and equipment manufacture of offshore wind turbine and offshore wind farm section.

For "nuclear energy", clauses have been added to cover technology and equipment for the emergency response/management of the nuclear power plant.

For "public security and emergency product", there are total of eight new additional clauses which cover multifunctional fire engine, high-tech firefighting equipment, fire proofing material, extinguishing material, sprinkler system, among others.

Under the restricted catalogue, a clause relating to thermal power units discharging cooling water directly to the river has been removed. Several traditional fire-proofing materials have also been added under the section relating to "firefighting".

Under the eliminated catalogue, the New Guideline removes the clause "PVC packaging product directly contacting the food" and the "disposable foamed plastic dishware."

The Guideline is a framework document intended to reflect the macro industry policies in China. The New Guideline supplements this and shows the following trends:

  • Supporting the development of the clean energy by adding new terms under the encouraged catalogue.
  • Attending to public security and supporting the development and usage of high-tech, multifunctional and green products and materials.
  • Highlighting energy saving and environment protection. As mentioned above, the "thermal power unit discharging cooling water directly to the river" clause, now removed, previously caused many local governments to put a lot of resources on the secondary cooling system and led to additional energy consummation.
  • Reflecting the development of the technology in the past two years.

Conclusion

The Guideline is an important reference point for governmental departments and local governments when creating local industry policies, investment catalogues and tax policies. Depending on the effectiveness of the New Guideline, it is possible that we may see further adjustments of the various local industry and tax policies in the future.