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OECD Investment Policy Reviews China Progress and Reform Challenges: The regulatory framework for FDI in China


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A body of legislation relating to foreign direct investment (FDI) and foreign‐invested enterprises (FIEs) has been passed since 1978. Separate laws govern FIEs of different forms. These laws specify the procedures for examining and approving FDI projects as well as some incentive measures. Major changes resulted from China's accession to the World Trade Organisation (WTO) in 2001, including the opening up to foreign investment of several services sectors. FDI is guided into or away from specific sectors of the economy by four Catalogues for Guidance of Foreign Investment Industries: prohibited, restricted, permitted and encouraged. Incentives are provided to encourage investment in the Central and Western regions. One result of WTO entry was the removal of traderelated investment measures (TRIMs) such as local‐content requirements and export performance requirements, and the requirement that FIEs balance their foreign exchange receipts and expenditures...
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Document Type: Review Article

Publication date: July 1, 2003

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