China Issues Industrial Guidance for Outbound FDI

China’s Ministry of Commerce (MoC), in conjunction with the National Development and Reform Commission and the Ministry of Foreign Affairs, recently promulgated the “Industrial Guidance for Outbound Foreign Investment in Different Countries (2011) (the Guidance).”

The Guidance – which compiles information based on each country’s official economic planning, documents and statistics – involves 115 countries (32 from Asia, 37 from Africa, 12 from North and South America, 30 from Europe and 4 from Oceania).

The 306-page Guidance (available here in Chinese) mainly introduces each country’s major industrial development goals, critical industrial sectors, and important development zones as well as their industrial focus. It also explicitly lists industries whose development is given priority, and explains market access for foreign investors across distinct industrial sectors. In addition, along with lists of the most commonly traded products in the 115 countries, the Guidance covers the major exported and imported products to and from China.

The Guidance also includes information on external bilateral investment protection treaties and double taxation avoidance conventions that China has acceded to.

The MoC says the issuance of the Guidance is part of China’s “Going-out” strategy, which is highlighted in the country’s 12th Five-Year Plan for development between 2011 and 2015.

An official from the Foreign Cooperation Division of the MoC emphasized that enterprises intending to invest overseas should objectively evaluate their own financial strengths and conditions, and conduct an in-depth study on the investment environment – especially the legal and regulatory environment – of relevant countries. For these investors, the Guidance will be helpful with its comprehensive information package.

The MoC and relevant government departments will be continuously updating, adjusting and improving the Guidance in accordance with the needs of the enterprises and the development of the individual countries, so as to guide Chinese enterprises to invest abroad more safely and effectively.

In addition to this industrial Guidance, the MoC has also been issuing the “Country Guidance for Outbound Foreign Investment and Cooperation” since 2009 on an annual basis.

---