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Questions about the New Catalogue for the Guidance of Foreign Investment Policies

The full text of the new Catalogue for the Guidance of Foreign Investment Policies (Amended in 2007), the Catalogue, which was released by the National Development and Reform Commission and the Ministry of Commerce, became effective on December 1, 2007. This Investment Q&A column reviews some of the major changes in the Catalogue.

Q: What principles have been employed with in the amendment of the Catalogue?

A: The following principles have been employed with in the amendment of the Catalogue:

First: China will continue to expand opening-up. According to China’s commitments to the World Trade Organization (WTO), China should carefully consider the nature of foreign direct investment and new trends in international industrial transfers, continue to proactively and effectively use foreign investment, and emphasize the introduction of advanced foreign technologies, management practices and experienced and highly-qualified personnel through foreign investment utilization.

Second: China will enhance its industrial structural optimization and upgrading; steer more foreign investment toward modern agriculture, high and new technological industries, the modern service industry, high-end manufacturing, infrastructural and environmental and ecological protection; maintain reasonable limits of investment in our industries based on their capacities.

Third: China will save resources and protect the environment. It encourages foreign investors to invest in cost-effective and clean energy sources and practices, resource industries and enterprise technology reform projects; encourage foreign investors to advance the recycling economy and renewable energy; and to restrict or prohibit access to high-material and high-energy consuming and highly polluting foreign investment projects.

Fourth: China will actively and prudently expand the opening-up of the service industry; fulfil its commitment to the WTO in the fields of service and trade, and steadily accelerate the opening-up of the service industry. China encourages foreign investors to invest in productive service industries; proactively conduct international service outsourcing; and pay attention to the development of the new service industry. We must stimulate the opening-up of a few sensitive service industries in a steady manner.

Fifth: China will encourage foreign investors to get more involved in technological innovation activities; encourage multinationals to establish research and development centres and training centres in China; and cooperate with domestic enterprises and scientific and research institutions; improve supporting activities and expand our industrial chains. China will establish an opening-oriented innovation system.

Sixth: China will safeguard national economic security. Prudent attitudes should be adopted in terms of opening some strategic and sensitive industries relevant to national economic security.

Q: Are there any new regulations concerning the criteria, scope and proceedings for the approval of foreign invested projects in the new Catalogue?

A: The Catalogue is an important orientation policy for attracting foreign investment in the new period of China, and serves as the major basis for the direction and approval of foreign invested projects and related applicable policies for foreign invested enterprises. The provisions in the Catalogue stating the share proportion of “restricted to joint ventures and cooperative enterprises,” “holding of shares by the Chinese Party” or the “Chinese Party taking a relative majority stake” are applicable to foreign investment access of newly established projects and to foreign invested projects like capital increase and mergers and acquisitions of foreign invested enterprises. The reform of the foreign invested project approval management system shall be combined and keep abreast of the deepening of the reforms of the investment and financing system. The scope and proceedings of foreign invested project approval shall conform to Guiding the Directions of Foreign Investment Provisions (No. 346 of the State Council) and Resolution of the State Council on Investment System Reform (National Development No. [2004] 20).

Q: Some existing foreign-invested enterprises operate in fields prohibited under the new Catalogue. Should they quit China?

A: For those prohibited projects in the Catalogue, if they have been in existence and operation, policies in their approval shall be adopted. Under the new Catalogue, however, in the capital increase and equity transfer of original enterprises or overseas listing of domestic enterprises, the new Catalogue shall prevail for those involving newly added prohibited projects.

外商投资产业指导目录问题解答

中国国家发展和改革委员会、中国国家商务部全文公布了《外商投资产业指导目录(2007年修订)》(以下简称《目录》)，自2007年12月1日起施行。

问：在《目录》修订中主要遵循哪些原则？

答：《目录》修订主要遵循以下原则：

一    是坚持进一步扩大对外开放。依据中国加入世界贸易组织的承诺，结合吸收外商直接投资情况和国际产业转移的新形势，继续积极有效利用外资，重点通过利用外资引进国外先进技术、管理经验和高素质人才。

二    是推进产业结构优化升级。引导外资更多地投向现代农业、高新技术产业、现代服务业、高端制造环节、基础设施和生态环境保护。遏制产能过剩行业盲目投资。

三    是节约资源，保护环境。鼓励外商投资节约、高效、清洁的能源、资源产业和企业技术改造项目，鼓励外商投资发展循环经济和可再生能源，限制或禁止高物耗、高能耗、高污染外资项目准入。

四    是积极稳妥地扩大服务业开放。履行服务贸易领域加入世贸组织承诺，稳步推进服务业进一步开放。鼓励外商投资生产性服务业，积极承接国际服务业外包，注重新型服务业发展。稳步推进少数敏感性服务行业的对外开放。

五    是鼓励外商投资技术创新活动。鼓励跨国公司在中国设立研发中心、培训中心，鼓励外商投资企业和国内企业、科研院所开展合作，增强配套能力，延伸产业链。创建开放型的创新体系。

六    是维护国家经济安全。对部分涉及国家经济安全的战略性和敏感性行业，持谨慎开放的态度。

问：新《目录》是否对外商投资项目的核准要求、核准权限和程序做出了新的规定？

答：《目录》是中国新时期吸收外商投资的重要导向政策，是指导外商投资项目核准工作和外商投资企业适用有关政策的主要依据。对《目录》中含有“限于合资、合作”、“中方控股”或“中方相对控股”股比要求的条目，既适用于新建项目的外资准入，也适用于外商投资企业增资、外资并购等各类外商投资项目。外商投资项目核准管理体制的改革将结合深化中国投融资体制改革一并进行。目前，外商投资项目核准的权限和程序，仍按照《指导外商投资方向规定》(国务院第346号令)和《国务院关于投资体制改革的决定》(国发[2004]20号)执行。

问：对目前已经设立的外商投资企业，但属于新《目录》中增加的禁止外商投资领域，外商是否应当退出？

答：对此次在《目录》中新增列为禁止类的项目，如目前已经存在并运营的外商投资企业，执行项目核准时的政策。新《目录》实施后，原有老企业的增资、股权转让或境内企业境外上市等，凡涉及新增禁止类领域的，须按照新《目录》的规定执行。