MOFCOM Further Delegates Foreign Investment Approval Authority

On March 12, 2009, the Ministry of Commerce of the PRC ("MOFCOM") posted on its official website two circulars: the Notice of Ministry of Commerce on Further Enhancement of the Approval Scheme for Foreign Investment [Shang Zi Han No.7 (2009)]("Circular 7"), effective March 5, 2009, and the Notice of Ministry of Commerce on Delegation of the Approval Authority on Establishment of Foreign Invested Holding Companies [Shang Zi Han No.8 (2009)]("Circular 8"), effective March 6, 2009.

These two circulars, together with other recent circulars and the Foreign Investment Handbook¹ recently issued by MOFCOM, indicate a major shift in MOFCOM's foreign investment approval policy, which has been in place for over 30 years. With this change, MOFCOM has effected a delegation of its approval authority over foreign investment to its local counterparts.  The practical impact of the new policy is that, with the exception of certain large-scale and high-profile projects that will