China Sets Out Restrictions, Shopping List For FDI

In a statement on the NDRC's Web site, the agencies said the new guidelines would help put FDI to better use to spur innovation, promote industrial restructuring and ease regional imbalances -- priorities set at the recent Communist Party Congress. "(They) mark a departure from the policy of simply encouraging exports," they said. "Facing an overly large trade surplus and rapid growth in foreign exchange reserves, we will no longer employ a policy that gives blanket encouragement to exports." The guidelines, which take effect on December 1, update the existing set, issued in late 2004. The statement marks the latest policy initiative by Beijing to upgrade the structure of its economy, rein in exports and direct investment to priority sectors. It also underlines Beijing's increasing pickiness with foreign investment. For example, while China will now bar foreigners from projects mining rare minerals or those that are non-renewable, it will continue to encourage them to put money into difficult mines or those in under-invested areas. Foreigners will also be prohibited from investing in small and mid-sized refineries. Foreign firms will now be banned from building or managing golf courses; in the past, they fell into the restricted category. The new regulations also state that foreign companies will be banned from investing in news Web sites, Internet audio-visual services and Web cafes. ... http://www.reuters.com/article/environmentNews/idUSPEK33905220071107? [Proofreader’s note: this article was edited for spelling and typos on November 8, 2007]

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