At meetings of the State Council on 28 July and 8 August 2017, it was indicated that there is to be a relaxation of the requirements for foreign investors to have Chinese co-investors for their China investments. Details are expected by September 2017, and initial considerations are set out in this Alert.
In the June 2017 Catalogue of Industries for Guiding Foreign Investment (“2017 Catalogue”) restrictions were set out for foreign direct investment in 63 economic sectors. This was reduced from 93 in the 2015 Catalogue. 26 of these set maximum foreign investor equity percentages in invested Chinese entities. These requirements are now set to be reduced/removed for certain sectors, with details due in September 2017. Sectors currently covered by the restrictions, with potential for liberalization, are the manufacturing of automobiles, vessels and planes, transportation services, telecommunication services, financial services, and culture and entertainment services.
The 28 July announcement provided limited detail, and further alerts will be issued in September as the details of the State Council plans emerge.
Other 28 July State Council meeting measures include:
This is the first in a series of articles, titled “China to boost foreign direct investment”, covering the announced policy changes from the 28 July State Council meeting. Further articles are to follow.