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The Legal System for Foreign Investment

Investment Promotion

· INSIGHTS

§ Catalogue of Encouraged Foreign Investment Industries

China implements policies to encourage and guide foreign investment. Up to now, the latest industry catalogue for guiding foreign investment is the Catalogue of Industries for Encouraging Foreign Investment (2019 Version), jointly issued by the National Development and Reform Commission and the Ministry of Commerce on June 30, 2019, and was taken into effect on July 30, 2019.

§ Equal Participation in Competition

With regard to the various policies supporting enterprise development, foreign-invested and domestic-funded enterprises enjoy equal access to rights including but not limited to government funding, land supply, tax cuts and fee reductions, licensing and permits, and the setting of standards, project reports, and human resources. As regards specific regulatory measures, all relevant provisions of the Company Law of the People’s Republic of China and Law of the People’s Republic of China on Partnerships shall be applied to both domestic and foreign-invested enterprises.

The government treats domestic and foreign-invested enterprises equally in procurement activities. Foreign-invested enterprises are entitled to equal and lawful participation in government procurement activities organized by the central or local governments. No organization should treat the products and services provided by foreign-invested enterprises in China differently from those provided by domestic-funded enterprises in terms of government procurement. Nor should any organization discriminate or restrict them in any form, nor should they obstruct or restrict foreign-invested enterprises from freely entering the government procurement market in local regions and industries. Foreign-invested enterprises shall not face discrimination in the release of government procurement information, supplier assessment and qualification examinations, bid evaluation standards, etc., nor are they to be restricted in terms of supplier qualifications for ownership or organization, ownership structure, investor nationality, and product/service brand. The above regulations guarantee the right of foreign-invested enterprises to participate in Chinese government procurement on an equal footing.

Foreign-invested enterprises enjoy fair treatment in the formulation and application of various standards. The State shall guarantee that foreign-invested enterprises can participate equally in setting standards (in accordance with the law) and shall improve information disclosure and social supervision for the setting of standards. Compulsory standards formulated by the State shall apply equally to domestic and foreign-invested enterprises. No differential or discriminatory treatment shall be allowed, and no technical requirements higher than the compulsory standards shall be specifically applied to foreign-invested enterprises. Domestic and foreign-invested enterprises shall participate in the formulation and revision of national standards, industry standards, local standards, and group standards on an equal basis in accordance with the law. Foreign-invested enterprises may formulate enterprise standards either by themselves or jointly with other enterprises as needed.

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