News Archive

Ban for FI in 75 sectors - catalogue
2002/03/14

Beijing - The Chinese government has released a list of sectors banned for foreign investments (FI) starting from April 4 according to Reuters.

Construction, operation of power grids and aviation transport control companies are some of the sectors that will remain under strict Beijing control after the countries accession to the World Trade Organization (WTO) in December the article stated.

The Foreign Investment Guidance Catalogue also includes a continued grip on the media sector to ban politically sensitive news or pornographic content. Broadcasting and television sectors, all state owned, will remain closed for FI it said.

Beijing is also banning FI in the production and development of genetically modified seeds, a highly controversial decision as foreign industry officials claim it is to protect the extensive local market according to Reuters. Chinese officials however say it is in the interest of protecting public health.

The government stimulates FI in 262 areas up from previously 186 Xinhua reported. Barred foreign investment sectors would decrease from 112 to 75 sectors.

For Mark Schaub, lawyer at King and Wood in Shanghai, this is an important document for law but he sees changes with the previous edition.

"There is a different emphasis," Schaub said. The catalogue is protecting the traditional industries such as tea, trees, fisheries and herbal medicine but "It is encouraging telecom and power industries."

"It also encourages Western China for opportunities," Schaub said.

The release of the 25 page document follows last month's cabinet approval of new rules on FI aimed at bringing the investor opportunities in harmony with China's WTO commitments. The list was last updated in 1997.

China is keen to attract more FI to compensate for slowing export growth. Shi Guangsheng, Foreign Trade Minister, said on Tuesday that US$45-50 billion of FI would flow into China this year. Last year, the countries FI amounted to US$46.8 billion.

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