Foreign Investment: China Issued New Incentive Policies on Foreign Investment

These incentives are clearly response of the Chinese government toward the exodus of foreign investment in recent years. We see signs of relaxed control over the commercial activities in general, stronger intention to protect IPR, and national treatment to FIEs in areas like R&D. However it is more accurate to say these policies are currently staying as general principles only. Whether or not the State Council can really execute them locally remains to be seen.

On January 17th, The State Council published a 20-article Notice on measures to broaden the openness of market and effectively utilize foreign investment (the “Notice”), which includes measures to liberalize the market access, improve the investment environment and attract foreign investment. What is worth mentioning may be that the corresponding competent authorities are listed after each set out measure, which seems to add more serious expression to the Notice.

Here are some highlights that may have impacts on Nike’s business in China:

  • Liberalizing market access: The Notice indicates that the Foreign Investment Industrial Guidance Catalogue and other relevant policies and regulations will be revised to further relax the restriction on foreign investment in manufacturing and other sectors. Specifically, foreign investment in high-end, smart or green manufacturing projects is encouraged as well as other efforts to upgrade the traditional industries.
  • Research and development: Foreign-invested enterprises and research institutes are allowed to cooperate with their domestic counterparts on R&D initiatives. FIEs are able to take part in projects listed in the national science and technology plan, get tax deductions for R&D expenses, and enjoy other incentives for hi-tech companies and R&D centers.
  • National treatment: Reiterating the State Council’s Opinions on Fair Competition in 2016, the Notice requires all local and departmental rules and regulations to comply with the national policies and prohibits discriminatory practices against foreign investment. When it comes to the regulatory approval procedures for business licenses and qualifications, the same time frame and criteria must apply to both FIEs and local companies. The Notice also emphasizes equal treatment in government procurement projects.
  • Intellectual property protection: The Notice stresses the protection of FIEs’ IPR by improving the IP law enforcement mechanism, and reinforcing the efforts in rights safeguarding assistance, arbitration and mediation. International cooperation on IPR protection, such as the establishment of mediation and arbitration branches of international organization, is are welcomed.
  • Involvement in standard setting: The Notice calls for equal opportunities for both Chinese companies and FIEs in China’s standard setting efforts to improve the transparency of standard setting and revising process. Information sharing and public supervision are emphasized.
  • Incentives to foreign investment: The Notice openly allows local governments, particularly in the north-west and north-east regions, to formulate local rules giving FIEs income tax, land, and other incentives to attract foreign investment.


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A Review of China's Reforms to FDI Administration Regime in 2016

  Authored by Simon Li (lixiameng@anjielaw.com) and Bo Hu (hubo@anjielaw.com) at AnJie Law Firm

Over the Year 2016, the Chinese government has overhauled its regime of administration over foreign direct investment (“FDI”) by promulgating a series of amendments to laws and new regulations to introduce a record-filing process to replace the pre-approval process, and to shift its focus from pre-approval to post-filing supervision. The new FDI administration regime simplifies administrative formalities and establishes a more efficient system for FDI. It will certainly bring significant and positive influences on foreign investors who plan to invest in China as well as those who are now operating businesses in China through foreign invested enterprises (“FIE”). This article will review those noteworthy changes brought by the new FDI administration regime.   

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China Purports to Adopt New Measures to Boost Foreign Investment in 2017

 Authored by Bo Hu (hubo@anjielaw.com) and Simon Li (lixiameng@anjielaw.com) at AnJie Law Firm

Since September of 2016, the Chinese government has adopted a series of measures to reshape its FDI regime, signaling its determination to strengthen efforts to attract more foreign investments in the coming years. As a significant move, the State Council passed the Circular on Measures for Further Opening Up and Active Use of Foreign Investment (the “Circular”) on December 28, 2016, which purports to further relax the curbs on foreign investment to boost the economic transformation and industries upgrading and transfer in order to adapt to the new domestic and abroad economic situation. The text of the Circular will be officially released to the public shortly. But in a recent press briefing of the State Council, some highlights of the Circular have been revealed. According to the highlights revealed in the press briefing, the Circular lays foundation for the future foreign investment policies in the following aspects: 

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