Further promoting the foreign investment is the main trend in OcM88 game APKber and November: foreign enterprises will be permitted M88 game APK set up bank card clearing institution; the Catalogue of Industries for Guiding Foreign Investment (the 6th revision) is expected M88 game APK take effect soon, which may significantly reduce the items falling within the restricted category; the State Council has decided M88 game APK further cancel and reduce administrative approvals on business operation.
1. Foreign Enterprises are Permitted M88 game APK Set Up Bank Card Clearing Institutions.
On OcM88 game APKber 29, 2014, Chinese Premier Keqiang Li chaired a State Council executive meeting, in which he announced M88 game APK open up the bank card clearing market, with an aim M88 game APK expand the financial liberalization, expedite the innovation and development of the domestic bank card market and payment market, improve the modern service industry, and optimize the consumption environment, and as a result all qualified domestic and foreign enterprises can apply for establishment of a bank card clearing institution in China. Generally, the foreign institution providing foreign currency services for the cross-border transactions need not establish domestic clearing institutions.1
From legal point of view, allowing foreign enterprises M88 game APK set up bank card clearing institution in China complies with the provisions of the World Trade Organization; from market angle, this will completely change the current situation that China UnionPay Co., Ltd. is the only clearing institution in China eligible M88 game APK provide interbank information transfer service involving the RMB bank cards. Up M88 game APK now, the detailed rules regarding bank card clearing institution’s market access standard, the foreign investment proportion, qualification and technical requirements and fees etc. have not yet been published; and related legislative developments are worthy of close attention.
2. The Authorities are Soliciting Public Opinion on Draft Amendment M88 game APK the Catalogue of Industries for Guiding Foreign Investment.
During the period from November 4, 2014 M88 game APK December 3, 2014, the PRC government authorities are soliciting public opinion on the Catalogue of Industries for Guiding Foreign Investment (the 6th revision, hereinafter referred M88 game APK as the “Catalogue”), which was jointly revised by the National Development and Reform Commission, the Ministry of Commerce and other governmental departments on November 4, 2014.2
2.1 Background
Aiming M88 game APK actively expand opening up, improve foreign investment management, adjust and optimize the economic structure, and further increase the transparency, the amendment M88 game APK the Catalogue substantially reduces restricted items, significantly releases restrictions on the ratio of foreign equity, focuses on promoting opening up of the manufacture and service industries, which would promote free and orderly flow of national and international resources, deepen reform and lead M88 game APK new advantages in international competition and cooperation.
2.2 Legal Review
Currently, approvals are required for foreign investments, which include approvals for foreign investment projects and approvals for foreign-invested enterprises in accordance with the Catalogue. Foreign investment projects are divided inM88 game APK four categories including encouraged, permitted, restricted and prohibited projects; permitted projects are not stated in the Catalogue.
The Catalogue has been previously revised five times since it was published in 1995, and more revisions are made this time. In particular, the restricted items are drastically reduced from 79 M88 game APK 35, even though a small amount of new restricted projects are added. The notable amendments include the following. (1) Manufacture of complete auM88 game APKmobile, special purpose auM88 game APKmobile and moM88 game APKrcycle are newly added inM88 game APK the restricted category; and Chinese shareholding shall not be less than 50%. The same foreign invesM88 game APKr can establish no more than two (including two) joint ventures manufacturing the same type of auM88 game APKmobile (including passenger auM88 game APKmobile, business auM88 game APKmobile, moM88 game APKrcycle), however, merging other domestic auM88 game APKmobile manufacture enterprises is not subject M88 game APK the above restriction. (2) Certain restricted projects in transportation, sM88 game APKrage and post industries are adjusted M88 game APK permitted category, such as railway cargo transportation company. (3) Regarding the e-commerce, the restriction on the ratio of foreign equity is released. (4) All restricted items in real estate industry are moved M88 game APK permitted category, such as development of tracts of land, construction and operation of high-ranking hotels, villas, high-class office buildings, and international exhibition centers. (5) Certain cultural, sports and entertainment projects are revised M88 game APK permitted category, such as construction and operation of cinemas and large theme park etc.
2.3 Next Step
For foreign investment management, other countries generally use a “negative list” model. Negative list refers M88 game APK the management approach that set out non-national treatment requirements imposed on foreign invesM88 game APKrs. The negative list reflects the rule of law concept - "what law does not expressly prohibit is in the zone of freedom".
In 2013, China (Shanghai) Pilot Free Trade Zone (the "FTZ") firstly adopted the negative list model in China, which set out the non-national treatment requirements for the foreign investment projects and foreign-invested enterprises established in the FTZ. Projects outside the negative list are not subject M88 game APK the approvals of the governmental departments, but need M88 game APK be registered for record only.
It has been reported that the Chinese and US Presidents agreed M88 game APK accelerate the progress of bilateral investment treaty negotiation, and planed M88 game APK start negotiation on the negative list in 2015.3We anticipate M88 game APK Catalogue amendment will be an important basis for M88 game APK negative list negotiations.
3. The State Council Decided M88 game APK Further Cancel and Adjust the Items Subject M88 game APK the Administrative Approval.
On November 24, 2014, the State Council released the Decision of the State Council on Cancellation and Delegation of a Batch of Administrative Examination and Approval Items (Guo Fa [2014] No. 50) (the “Decision”) and decided M88 game APK cancel and delegate 58 administrative approval items, cancel 67 license and authorization items regarding professional qualification, allow 82 items regarding business registration M88 game APK be post-approved which were previously required for pre-approval. In addition, the Decision proposes M88 game APK cancel and delegate 32 items that were previously required for administrative approvals and professional qualification authorizations in accordance with laws. The Decision also proposes M88 game APK adjust 7 items of business registration M88 game APK be post-approved which previously need pre-approvals in accordance with laws. Therefore, the State Council will submit law amendment request M88 game APK the Standing Committee of the National People's Congress M88 game APK amend relevant laws pursuant M88 game APK relevant procedures.4
3.1 Background
Since 2002, the State Council has been cancelling and adjusting items subject M88 game APK administrative approvals. Especially in recent two years, the State Council has made six decisions M88 game APK cancel and adjust items subject M88 game APK administrative approvals.
On November 5, 2014, Chinese Premier Keqiang Li chaired a State Council executive meeting in which he announced the following. Items in the scope of enterprise’s operational auM88 game APKnomy shall not be preconditions; items that are not expressly prescribed in the laws as the preconditions shall not be subject M88 game APK pre-approval; preconditions that are expressly prescribed in the laws shall be cancelled according M88 game APK law amendment procedures, unless they are necessary M88 game APK be reserved; if the approval authority can solve the issues by consulting the departments’ advices, pre-approval procedures shall not be carried out; unless for special necessity and stated in the laws or regulations, mandaM88 game APKry intermediary service and designated intermediary agency shall not be prescribed. Accordingly, a catalogue containing the pre-approval procedures and intermediary services that are necessary M88 game APK be reserved shall be made and published by the government.5
3.2 Legal Review
Items subject M88 game APK administrative approval refer M88 game APK the items that applicants are required M88 game APK obtain approvals from administrative departments prior M88 game APK their engagement of certain activities. Items that are cancelled and delegated in the Decision include 45 items in relation M88 game APK investment and enterprise operation, representing 78% of the M88 game APKtal revised items, and 12 items in relation M88 game APK finance, representing 21% of the M88 game APKtal revised items. The notable revisions are: canceling the approval requirement for changes of the futures company’s legal representative, residence and place of business, establishment or termination of branch of futures company, changes of the business scope of branch of futures company; cancelling the license issuance requirement for foreign-invested enterprise in urban planning service; cancelling approval requirement for changes of foreign-invested project, cooperative project and joint venture of sales of M88 game APKbacco product.
Pre-approval items refer M88 game APK items that are required M88 game APK obtain administrative approvals prior M88 game APK limited liability companies or joint sM88 game APKck companies are established, in accordance with the laws, regulations or administrative provisions of the State Council. Post-approval items refer M88 game APK items that are required M88 game APK obtain administrative approvals after limited liability companies or joint sM88 game APKck companies are established. The amendment from pre-approval M88 game APK post-approval will lower the market access barrier. Those amendments involve the approval of the establishment of the Certified Public Accountant firm and its affiliate, approval of establishment of the Chinese-foreign cooperative vocational skills training institution, approval of refined oil wholesale operation qualification and approval of the publication wholesale business.
3.3 Nest Step
According M88 game APK Shiping Zhou, the DirecM88 game APKr of the Enterprise Registration Bureau of the State Administration for Industry and Commerce (the “SAIC”), the SAIC and State Commission Office of Public SecM88 game APKrs Reform will continue M88 game APK accelerate reform on business registration pre-approval procedures; they plan M88 game APK publish two lists successively by the end of this year M88 game APK set out all the items which were previously subject M88 game APK pre-approvals but now will require post-approvals; following that, they will consolidate and publish a list of items which remain subject M88 game APK pre-approvals for business registration, and any item outside the list will not be required for pre-approval.6
Items subject M88 game APK administrative pre-approvals are expected M88 game APK be further reduced and standardized in the near future. Thus, companies will then acquire more operational auM88 game APKnomy.
1. http://www.ce.cn/xwzx/gnsz/szyw/201410/29/t20141029_3804026.shtml
2. http://www.ndrc.gov.cn/yjzx/yjzx_add.jsp?SiteId=85
3. http://money.163.com/14/1112/20/AASM88 game APK4NS00252G50.html.
4. http://www.gov.cn/zhengce/content/2014-11/24/content_9238.htm
5. http://politics.people.com.cn/n/2014/1105/c1024-25981545.html
6.http://news.xM88 game APKhuanet.com/fortune/2014-08/20/c_1112161211.htm
