Investments and Business Ventures in China

China’s infamous attempt at exercising control over its inbound foreign investments is embodied by the yearly issuance of the Catalogue for the Guidance of Foreign Investment Industries (the Catalogue). For many years, this Catalogue listed encouraged industries where foreign investments were encouraged along with a list of industries where foreign investment was either restricted or prohibited (The Negative List). Up until this year, foreign investors had to take the list of encouraged industries for investments as the basis for their investments. However, with the 2017 revision to the Catalogue, the Ministry of Commerce announced that unless an industry is included in the Negative List, foreign investment to that industry shall be permitted. This announcement hinted that the PRC is taking steps to opening up its market even more to foreign investment. This hint was confirmed when the new catalogue was officially published (only in Chinese for now) a few days ago.

The number of industries in the Negative List was cut down from 93 to 63 industries: that’s a 32% reduction. Major changes include the opening of services such as highway passenger transport, credit investigation and rating service, accounting and auditing to foreign investment. In the manufacturing industry, restrictions over foreign investment into automotive electronics, batteries of new energy automobiles and rail transportation equipment have been lifted. Having in mind the “One Belt, One Road” (OBOR) initiative has a backdrop, China has embarked on recently to connect China by various railway connections to Europe and the newly approved 36 billion Dollar project on expanding the Chinese rail connection from Beijing to Tianjin. China seems more and more eager to welcoming foreign investors to assist, among other things, in expanding its, already world’s largest, high-speed rail network.

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