On June 28 2017 the recently amended Catalogue for the Guidance of Foreign Investment Industries was promulgated by the National Development and Reform Commission and the Ministry of Commerce. The new rules will be implemented on July 28 2017.

The amended catalogue reduces the scope of restricted foreign investment and improves the investment potential in various industries, including mining, manufacturing and servicing. Further, it formally establishes the standard of Special Administrative Measures for Access of Foreign Investments (Negative List for Access of Foreign Investments) in the foreign invested enterprises laws amended in October 2016.

According to the amended catalogue, foreign investment into the banking sector is subject to the following restrictions:

  • A single foreign financial institution, together with its affiliates, may invest in no more than 20% of the shares of a domestic Chinese commercial bank as promoter or strategic investor.
  • Multiple foreign financial institutions, together with their affiliates, may invest in no more than 25% of a domestic Chinese commercial bank as promoter or strategic investor.
  • Only foreign banking financial institutions may invest in domestic Chinese rural small to medium-sized financial institutions.
  • Only foreign commercial banks may be the sole shareholder or controlling shareholder of a foreign invested enterprise bank, while other types of foreign financial institution may invest as non-controlling shareholders.

The first three restrictions were included in the previous catalogue and the last one is a codification of the existing rules that can be found in the Administrative Regulations of the People's Republic of China on Foreign-Invested Banks 2014.

For further information on this topic please contact Wu Jiejiang at Jingtian & Gongcheng by telephone (+86 10 5809 1000) or email (jjwu@jingtian.com). The Jingtian & Gongcheng website can be accessed at www.jingtian.com.

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