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China Further Expands the Encouraged Catalogue to Boost Foreign Investment


What’s new?

On October 28, 2022, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) released the Catalogue of Encouraged Industries for Foreign Investment (2022 Version)(hereafter the “2022 FI Encouraged Catalogue), which will come info force on January 1, 2023.


Once enacted, the 2022 FI Encouraged Catalogue will replace its 2020 version.


Similar to the previous version, the 2022 FI Encouraged Catalogue includes two sub-catalogues – one covers the entire country (“national catalogue”) and one covers the central, western, and northeastern regions (“regional catalogue”). Together, the 2022 FI encouraged catalogue identifies industries where foreign direct investment (FDI) will be welcome and treated with favorable policies in China.


The newly released 2022 FI Encouraged Catalogue contains a total of 1,474 items (519 in the national catalogue and 955 in the regional catalogue), increased by 19 percent from 1,235 items (480 in the national catalogue and 755 in the regional catalogue) in the 2020 version.


The lengthening of the catalogue demonstrates China’s firm standing on economic opening-up and the fact that more investment fields will favor foreign investors.


To break this down: the 2022 FI Encouraged Catalogue has added 239 items and modified 167 items (mainly expanding the area covered by the original entry). In the national catalogue, 39 new items have been added and 85 items modified, while 200 new items have been added and 82 items modified in the regional catalogue.


According to the official interpretation, the revision of the 2022 FI Encouraged Catalogue will serve three main purposes:

  • Boost foreign investment in manufacturing to upgrade China’s industrial and supply chains.

  • Promote the integrated development of the service and manufacturing sectors.

  • Encourage foreign investment in China’s central, western, and northeastern regions.

The additions to the regional catalogue account for 84 percent of all new entries. This can also be viewed as part of China’s efforts to promote common prosperity, a key task emphasized during the recent 20th Party Congress that aims to reduce wealth inequality and balance the level of social and economic development across different regions of the country.


Key changes in the 2022 FI Encouraged Catalogue

Nationwide, the catalogue has added or expanded items on manufacturing of components and parts and equipment. To be more specific:

  • In the field of end products manufacturing, items such as aviation ground equipment, glow discharge mass spectrometer, transmission electron microscope, and industrial water-saving equipment have been added or modified.

  • In the field of components and parts manufacturing, the new or modified items include shield machine bearings, key parts related to autonomous driving, high performance light metals, etc.

  • In the field of raw materials manufacturing, new items added or modified include high-purity electronic chemicals, high-performance coatings, and organic polymer materials.

In the service industries, foreign companies are encouraged to invest in production-oriented services, with items such as professional design, technical services, and development, newly added to the national catalogue. To be more specific:

  • In the field of technical services, new items added include advanced system integration technology and service of low carbon, environmental protection, green energy saving and water saving, development and application of environmentally friendly technology, design and research and development of offshore wind power equipment and marine new energy equipment.

  • In the field of business services, items such as retired wind turbine blades and waste photovoltaic modules recycling and processing, clean operation of traditional energy, engineering construction and technical services, language services, etc., are newly added or modified.

Read More at https://www.china-briefing.com/news/china-2022-encouraged-catalogue-updated-implementation-from-january-1-2023/

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