Notice and catalogue expand opening-up strategy

In 2016, with a global decrease of cross-border investment, China still attracted foreign investment of more than US$813.2 billion, more than a 4.2% increase on the previous year. Against this backdrop, China’s central government has continued its opening-up policy by issuing more policies in the new year to attract further foreign investment.

In the first quarter of 2017, the government issued several policies to drive the expansion of opening up to foreign countries, and enhancing the attractiveness of China for foreign investment and capital. Among these policies, the Notice of Measures regarding the Expansion of Opening to the Outside and Positively Using Foreign Capital by the State Council of the People’s Republic of China is a guiding document for using foreign capital. The Catalogue of Priority Industries for Foreign Investment in Central and Western China was also updated and issued, which aims to increase new industries to encourage foreign investment in central and western China. In this article, the authors discuss these two policies.

THE NOTICE

The State Council issued the notice on 17 January 2017. It includes 20 measures involving three areas. The first area is expansion of opening up to the world outside China, such as by expanding the access of the service, manufacturing and mining industries to foreign capital, and to support foreign capital joining the “Made in China 2025” strategy, which helps foreign capital integrate with the transformation and upgrade of the manufacturing industry. The notice also creates a level playing field by treating foreign-invested enterprises and domestic enterprises equally, such as by supporting and encouraging foreign-invested companies to be listed on the Shanghai Stock Exchange, Shenzhen Stock Exchange and the National Equities Exchange and Quotations, and to issue bonds and convertible loans.

The notice strengthens the policy of attracting foreign capital, allowing local government to formulate preferential policies regarding inviting investment within its statutory jurisdiction to support projects that make a contribution to employment, economic development and technological innovation.