PRC State Council Issues New Rules Encouraging Foreign Investment

China's State Council has just issued the Several Opinions on Further Improving the Work of Utilizing Foreign Investment, guofa [2010] No. 9, dated April 6, 2010, reaffirming its policy to encourage foreign investment.

The Opinions contain twenty provisions that cover, inter alia, approaches to improve the quality and variety of foreign investment, to redeploy certain foreign capital to the central and western regions, and to streamline the foreign investment regulatory system and improve the efficiency of the approval process.

Of particular note, the Opinions provide that the total investment threshold for foreign-invested projects that require central level approval (i.e., by the Ministry of Commerce and if applicable, by the National Development and Reform Commission) will be raised from USD 100 million to USD 300 million for projects that fall under the "encouraged" or "permitted" categories of the Industrial Category Guiding Foreign Investment. The Opinions