The Encouraged Industry Catalogue is a document produced by the
government
A government is the system or group of people governing an organized community, generally a state.
In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is ...
of the
People's Republic of China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
(PRC) and used to direct
foreign investment in and
international trade
International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (see: World economy)
In most countries, such trade represents a significant ...
with
mainland China
"Mainland China" is a geopolitical term defined as the territory governed by the People's Republic of China (including islands like Hainan or Chongming), excluding dependent territories of the PRC, and other territories within Greater China. ...
. It classifies various industries into four categorised as ''Encouraged, Permitted, Restricted and Prohibited'', which has subsequent effects on foreign firms wishing to operate in such
sector
Sector may refer to:
Places
* Sector, West Virginia, U.S.
Geometry
* Circular sector, the portion of a disc enclosed by two radii and a circular arc
* Hyperbolic sector, a region enclosed by two radii and a hyperbolic arc
* Spherical sector, a p ...
s.
Encouraged industries generally receive favourable tax treatment whilst those in the permitted category are treated on a quite neutral basis. If an industry is restricted, foreign investment is usually limited to a minority
shareholding
A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal own ...
in a
joint venture
A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and economic risk, risks, and shared governance. Companies typically pursue joint ventures for one of four rea ...
whilst prohibited industries cannot have any form of foreign investment at all.
On 28 December 2020, the
National Development and Reform Commission
The National Development and Reform Commission of the People's Republic of China (NDRC), formerly State Planning Commission and State Development Planning Commission, is a macroeconomic management agency under the State Council, which has b ...
(NDRC) and the
Ministry of Commerce A Ministry of Trade and Industry, Ministry of Commerce, Ministry of Commerce and Industry or variations is a ministry that is concerned with a nation's trade, industry and commerce.
Notable examples are:
List
*Algeria: Ministry of Industry and ...
(MOFCOM) published the 2020 version of the Catalogue, which came into effect on 27 January 2021, replacing the 2019 version.
[China Expands Encouraged Catalogue, Improves Foreign Investor Access]
/ref>
Encouraged industries
Foreign investment is encouraged in the following industries:[
* Advanced manufacturing industries.
* Production-oriented service industries.
* Regional advanced industries in the central, western, and northeastern regions.
The favourable treatment for encouraged industries include:][
* Tariff exemptions on imported equipment.
* Access to preferential land prices and looser regulation of land uses.
* The land transfer reserve price can be 70% of the national minimum price for industrial land.
* Corporate income tax rate can be reduced to 15%.
]
See also
* Economy of China
References
External links
China Expands Encouraged Catalogue, Improves Foreign Investor Access
Industry in China
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