China: NDRC's Briefing Meeting On Increased Openness To Foreign Investment

Last Updated: 15 March 2017
Article by Lester Ross and Jennifer Zhao

The US-China Business Council (USCBC) hosted a meeting on March 13, 2017, with the Foreign Investment Department of the National Development and Reform Commission (NDRC). Deputy Director General LIU Hongkuan (Mr. Liu) and senior officer GUO Rui (Ms. Guo) briefed USCBC members on the Notice on Several Measures on Increasing Openness to Foreign Investment and Active Use of Foreign Investment (Guo Fa [2017] No. 5) published by the State Council on January 17, 2017 (State Council Measures; for our recent client alert on the State Council Measures, please click here), and recent draft revision to the Catalogue for the Guidance of Foreign Investment Industry (the Catalogue). They stated that NDRC has coordinated with relevant departments to strengthen supervision to ensure implementation of the State Council Measures.

1. Increased openness to foreign investment

The State Council Measures are intended to expand China's openness to foreign investment into China. It consists of 20 measures divided into three sequential stages, i.e., market entry requirements, fair competition between foreign-invested and domestically invested companies, and preferential policies offered by local governments to attract foreign investment.

Mr. Liu stressed that the Chinese government intended to advance its opening-up policy through the revised Catalogue, inter alia, the number of industry sectors in which foreign investment is restricted or prohibited has been reduced to 62 items from 93 items under the current Catalogue (amended 2015). In particular, 35 restricted items and 27 prohibited items are included on the "negative list" by reference to the negative list first piloted in the Shanghai Free Trade Zone in September 2013, although the latter offers more liberal market entry requirements, RMB conversion and capital remittance, taxation, and administrative procedures. Mr. Liu stated that public comments solicited for the draft revision of the Catalogue have been reviewed by regulatory authorities, and it is anticipated that the new edition of the Catalogue will be published in the first half of this year.

This is consistent with President Xi Jinping's remarks at a panel discussion on March 5, 2017, with deputies to the 12th National People's Congress (NPC) from Shanghai Municipality at the annual session of the NPC in Beijing, where he stated that China will stick to its all-round opening-up policy, and continue to liberalize and facilitate trade and investment.

Mr. Liu also stated that foreign investment is encouraged in infrastructure construction in energy, transportation and environmental protection through public-private partnerships.

2. Strengthening fair competition between foreign-invested and domestically invested companies

The Chinese government called for creating a market environment of fair competition between foreign-invested and domestically invested companies, which requires relevant government departments to examine the business licenses and qualification applications of foreign-invested enterprises subject to the same standards and processing timetable applicable to domestically invested companies. Mr. Liu stated that a third-party consulting firm had been engaged to ensure that the State Council Measures met the goal of fair competition.

Ms. Guo further added that NDRC will shortly introduce the National Investment Project Online Approval and Supervision Platform. It is an online platform through which relevant PRC authorities will carry out approval and/or record filing for fixed assets investment projects (regardless of whether by foreign-invested or domestically invested companies) in China, including operating license issuance and other approval/recordation procedures, environmental protection assessments, construction inspection and acceptance, etc. It will link central, provincial, municipal and county-level authorities but will be supervised by the State Council. One unique code will be generated for each investment project and all related information can thereby be tracked. The online platform will further streamline government administration.

Mr. Liu stated that China is committed to providing "national treatment" for all foreign investors (although he added that no country in the world could realize complete "national treatment" in reality).

3. Formulating preferential policies offered by local governments

The State Council Measures allow local governments to adopt preferential policies to attract more foreign investment to support local employment, economic growth and technological innovation. Mr. Liu confirmed that the State Council Measures replaced the Notice of the State Council on Screening and Regulating Preferential Policies in Taxation and Other Aspects (effective November 2014), which barred local governments from adopting fiscal policy to provide preferential treatment to companies unless such polices were approved by the State Council.

Mr. Liu emphasized that such flexibility must be bounded by local government's statutory authority. Citing taxation as an example, Mr. Liu stated that the central government retains authority over formulation, adoption and implementation of tax policy.

In response to inquiries from members of different industry sectors, Mr. Liu responded that NDRC will transmit those inquiries to relevant departments so that the PRC authorities can take those concerns into consideration when formulating sector-specific industry policies.

The State Council Measures set out the main frame of reforms that China will roll out to attract foreign investment, and designate relevant departments to take charge of formulating detailed implementation rules. However, the Measures do not specify the extent or time frame for liberalization. Many reforms will likely be gradual, as they are part of a long-term effort to overhaul China's foreign investment rules in such sectors as automobile manufacturing and insurance. While the issuance of the draft revision to the Catalogue and State Council Measures marks progress, foreign investors are likely to expect more rapid and more extensive reform to create a more open and level playing field at a time when the Chinese government is also attaching greater weight to national security and social stability.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
R&P China Lawyers
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
R&P China Lawyers
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions