On 4 November 2014, the National Development and Reform Commission (NDRC) released a draft 2014 version of the Catalogue for the Guidance of Foreign Investment Industries for public comment until 3 December 2014.
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The new draft promises to open up a significant number of currently restricted and prohibited sectors to foreign investors. Compared to the current version of the catalogue, which was issued in December 2011, the draft catalogue reduces the restricted sectors for foreign investment from 79 to 35, and removes shareholding limitations in a wide array of industries.
Despite the opening-up of certain sectors, the draft falls short of some stakeholders’ expectations to eliminate the catalogue altogether and adopt a “negative list” beyond the Shanghai Free Trade Zone. Gu Dawei, director-general of the Foreign Investment Department at the NDRC, responded that China would start negotiations on the list at the beginning of 2015 as part of ongoing Sino-US bilateral investment treaty negotiations, but it will take time for China to adopt a negative list for foreign investments nationwide.
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Business Law Digest is compiled with the assistance of Baker & McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker & McKenzie by e-mailing Danian Zhang (Shanghai) at: danian.zhang@bakermckenzie.com
