China : Foreign investment restrictions to be cut

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Guidelines set to be published in April, focused on service and manufacturing sectors

China is cutting the number of industries in which it restricts foreign investment, in a move to further open up the market.

The new Catalog for the Guidance of Industries for Foreign Investment has gained approval from the State Council, China’s cabinet, and will come into force from April 10, the National Development and Reform Commission said on Friday.

The guidelines, which guide an increase or decrease of the flow of foreign investment into certain industries, will make the service and manufacturing sectors more accessible.

Within manufacturing, the list includes the ethylene, papermaking, and electric transformation equipment industries, while for services includes the e-commerce, logistics, transportation, finance and culture sectors. The number of restricted sectors has been cut from 79 to 38.

Zhao Jinping, director-general of the Department of Foreign Economic Relations at the State Council’s Development Research Center, said the move reflected a high level of openness and that the government is moving toward a management system based on negative lists, referring to the method of employing lists of only banned or restricted practices.

The negative-list management system has gained great traction after being promoted in the China (Shanghai) Pilot Free Trade Zone since its establishment in 2013, the country’s first such zone.

The number of sectors in which foreign investment is restricted in the Shanghai zone was reduced to 139 last year from 190 in 2013. The length of this year’s list is expected to be shorter again.

China attracted more foreign direct investment than any other country last year, worth $119.6 billion, up 1.7 percent year-on-year.

In a recent survey by the American Chamber of Commerce in Shanghai, however, three-quarters of the respondents believed that the city’s FTZ offered no tangible benefits for their business.

Zhao said the Shanghai FTZ is still in the initial period and foreign companies will begin to gain more tangible benefits once related policies and measures are put in place.

He said some of Shanghai’s practices, such as its innovative customs supervision model, are already being promoted in many other cities.

China has approved three new free trade zones in Guangdong province, Fujian province, and Tianjin municipality at the end of last year and is likely to approve more, largely based on the Shanghai model, in inland cities and border regions, said Zhao.

The NDRC solicited public opinion on revisions to the catalog in November.

Wang Dong, deputy director-general of the department of foreign capital and overseas investment under the NDRC, also said the new version shows the government’s strong commitment to opening up and improving the investment environment for foreign investors.

Of the other favored sectors within the new guidelines, modern agriculture, high technology, advanced manufacturing, energy efficiency and environmental protection, new energy and the modern service industries.

 

 

Source : China Daily | March 14, 2015

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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