China’s New Foreign Investment Catalogue Comes Into Effect

Today marks the coming into effect of the newly amended Catalogue for Guidance of Foreign Investment in Industry （外商投资产业指导目录） (the "Foreign Investment Catalogue" or "Catalogue"), issued December 24, 2011 by the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM).

This Alert discusses briefly the implications of the new Catalogue for foreign investors. The Catalogue represents relatively limited changes to its predecessor, issued in 2007. It reflects the planning priorities set forth in China's 12th Five Year Plan, which was promulgated by the National People's Congress in March, 2011, as well as the State Council's Opinions on Further Improving the Utilization of Foreign Investment (国务院关于进一步做好利用外资工作的若干意见) ("the 2010 Opinion"), issued April 2010, with liberalized foreign investment rules relevant to development of information technology, "clean" technology, high-technology manufacturing, and the service sector.