Opinions of the State Council on Further Improving the Use of Foreign Capital

Opinions of the State Council on Further Improving the Use of Foreign Capital

Guo Fa [2019] No.23

October 30, 2019

People's governments of all provinces, autonomous regions and municipalities directly under the Central Government, and ministries, commissions and all directly affiliated institutions under the State Council,

Opening up to the outside world is a basic national policy of China. Foreign capital has played a unique and important role in China's economic development. To promote high-quality development and the modernization drive, we must always attach great importance to the use of foreign capital. Currently, the international investment landscape is undergoing profound adjustments, and use of foreign capital in China is facing new situations, new characteristics and new challenges. In order to thoroughly implement Xi Jinping's Thought on Socialism with Chinese Characteristics for a New Era, fully carry out the spirit of the Nineteenth National Congress of the Communist Party of China (CPC) and the second, third and fourth plenary sessions of the Nineteenth CPC Central Committee, carry out overall planning to promote the "Five-in-One" overall layout, coordinate to push forward the "Four Comprehensives" strategic layout, put into practice the decisions and deployments of the CPC Central Committee and the State Council on stabilizing foreign capital, take stimulating market vitality and boosting investment confidence as the starting point, safeguarding the national treatment of foreign-invested enterprises as the focal point and creating an open, transparent and expectable foreign investment environment as the point of efforts, continue to deepen the reform of "streamlining administration, delegating powers and improving services", further improve the use of foreign capital, stabilize the scale of foreign investment, and optimize the structure of foreign investment, the following opinions are hereby put forward.

I. Deepen Opening up to the Outside World
(I) Support foreign investors to invest in new open fields. We shall continue to scale down the negative list of access for foreign investment across the country and in pilot free trade zones, comprehensively clear up and abolish restrictive measures which are not included in the negative list, safeguard the effective implementation of opening-up measures and continue to raise the level of opening up. (The National Development and Reform Commission and the Ministry of Commerce shall play the lead role, and all relevant departments and all provincial people's governments shall be responsible for the work according to their respective functions and responsibilities.)
(II) Accelerate the opening up of the financial industry. We shall comprehensively abolish restrictions on the scopes of business of foreign banks, securities companies, fund management companies and other financial institutions in China, enrich market supply and boost market vitality. We shall reduce the quantitative access requirements for foreign investors to invest in and set up banking and insurance institutions and run relevant businesses, and abolish the total asset requirements for foreign banks to establish foreign legal person banks and branches in China, as well as the requirements of operating years and total assets for foreign insurance brokerage companies to operate insurance brokerage businesses in China. We shall expand the scope of shareholders for investing in foreign banks and foreign insurance institutions, abolish the requirement that the sole or major shareholder of a Chinese-foreign joint venture bank must be a financial institution, and allow foreign insurance group companies to invest in and establish insurance institutions. We shall continue to support the handling of the establishment, alteration and other administrative licensing matters of foreign insurance companies and their branches in line with the principle of consistency between domestic and foreign investors. In 2020, we shall abolish the restriction that the foreign shareholding ratio of securities companies, securities investment fund management companies, futures companies and life insurance companies should not be more than 51%. (The People's Bank of China, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission shall be responsible for the work according to their respective functions and responsibilities.)
(III) Optimize foreign investment policies in the automobile field. All regions shall guarantee that new-energy vehicles (NEVs) produced by domestic and foreign automobile manufacturers enjoy the same market access treatment. We shall revise the measures for the parallel administration of corporate average fuel consumption and NEV credits, and allow the transfer of credits between foreign-invested vehicle enterprises in China after foreign parties reach agreement through consultation with their Chinese joint venture partners.
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