The Catalogue of Industries for Guiding Foreign Investment, jointly issued by the National Development and Reform Commission (NDRC) and the Ministry of Commerce, was published on the NDRC website and will take effect on December 1 2007.
The new guidelines have essentially put the brakes on all export-oriented foreign direct investment. Manufacturing sectors in which domestic production capacity has been strengthened, for example, have been removed from the "encouraged" category for foreign investment.
According to China Daily, the new regulation is in line with policies the country has adopted for over a year.
In manufacturing, foreign businesses are encouraged to invest in high-tech sectors, and equipment and new material manufacturing; in services, they are encouraged to invest in outsourcing and logistics, the NDRC said in a statement on changes to regulations on foreign investment issued three years ago. Additionally, the government will no longer give the green light to all export-oriented foreign direct investment.
In mining, China will ban foreign players from mining some ¡§important minerals that cannot be recycled¡¨ as well as high-energy consuming or highly-polluting projects. But foreign investment is encouraged in projects that require advanced technology.
The move intends to address the challenges of swelling foreign exchange reserves that reached US$1.43 trillion in September, as well as a widening trade surplus, which reached US$185.65 billion in the first three quarters, according to the NDRC.
Authorities also expect foreign investors to consider central and western China rather than just coastal provinces and cities, which currently accounts for 90 percent of the country¡¦s foreign investment.
The central government is stepping up efforts to promote environmental protection and save energy through a series of measures, including shutting down small- and low-efficient steel mills, stopping processing trade of high-polluting and energy-intensive products, as well as scrapping or cutting tax rebates for resource-intensive exports.