Foreign Investment Industrial Guidance Catalogue (2004 Revision)

(Promulgated by the National Development and Reform Commission and the Ministry of Commerce on 30 November 2004 and effective as of 1 January 2005. The Foreign Investment Industrial Guidance Catalogue issued by the original State Development Planning Commission, the original State Economic and Trade Commission and the original Ministry of Foreign Trade and Economic Cooperation on 11 March 2002 shall be simultaneously repealed.)

CATALOGUE OF INDUSTRIES IN WHICH FOREIGN INVESTMENT IS ENCOURAGED

1.       Agriculture, Forestry, Animal Husbandry and Fisheries

1. Improvement of medium- and low-yield agricultural fields.

2. Development and production of non-polluting cultivation technologies for, and product serialization of, vegetables (including edible fungi, watermelons and muskmelons), fruit and tea.

3. Development of new, high-quality, high-yield technologies for, and development and production of new, high-quality, high-yield varieties of, such crops as sugar, fruit trees, flowers, plants, herbage, etc. (excluding transgenic varieties).

4. Production of flowers and plants and the construction and operation of nursery centres.

5. Mulching and comprehensive utilization of crop straw and the development and production of organic fertilizer resources.

6. Growing and breeding of traditional Chinese medicinal materials (limited to equity and cooperative joint ventures).

7. Forest (bamboo) planting and cultivation of improved varieties.

8. Planting of natural rubber, sisal and coffee.

9. Breeding and raising of good breeding stock, poultry and aquaculture brood stock (not including precious and fine varieties unique to China).

10. Breeding and raising of famous, special and fine aquaculture products and deep water net-pen breeding.

11. Construction and operation of ecological environment protection projects such as the planting of trees and grasses to prevent and treat desertification and prevent water loss and soil erosion.

2.       Mining

1. *Risk exploration and development of petroleum and natural gas.

2. *Development of oil/gas pools (fields) in low permeability formations.

3. *Development and application of new technologies for increasing the crude oil recovery factor.

4. *Development and application of new technologies for petroleum exploration and development such as geophysical prospecting, drilling, logging, downhole operation, etc.

5. Exploration for, and development of, coal and associated resources.

6. Exploration for, and development of, coalbed methane.

7. Mining and dressing of low-grade, refractory metallurgical ores (limited to equity and cooperative joint ventures).

8. Exploration for, and mining and dressing of, iron ore and manganese ore.

9. Exploration for, and mining of, copper, lead and zinc ores (limited to equity and cooperative joint ventures; foreign investors may establish wholly owned enterprises in Western China).

10. Exploration for, and mining of, aluminium ores (limited to equity and cooperative joint ventures; foreign investors may establish wholly owned enterprises in Western China).

11. Mining and dressing of chemical ores of sulphur, phosphorus, potassium, etc.

3.       Manufacturing

1. Food processing

1. Storage and processing of grains, vegetables, fruits, poultry and livestock products.

2. Processing of aquatic products, cleansing and processing of shellfish and development of functional foods made from kelp.

3. Development and production of fruit, vegetable, protein, tea and coffee beverages.

4. Development and production of infant and geriatric foodstuffs and functional foods.

5. Production of dairy products.

6. Development and production of biological feeds and protein feeds.

2. Tobacco Processing

1. Processing of cellulose diacetate and tow.

2. Production of tobacco sheet through paper-making process.

3. Textile Industry

1. Production of special textile products for engineering uses.

2. Weaving, dyeing and finishing of high-grade lining fabric.

4. Leather and Fur Products Industry

1. Processing of wet blue leather of swine, bovine animals and sheep using new technologies.

2. Leather finishing using new technologies.

5. Lumber Processing and Bamboo, Rattan, Coir and Grass Product Industry

1. Development of new technologies for the comprehensive utilization of secondary wood, small wood and fuel wood and bamboo from forest areas and the development and production of new products from such comprehensive utilization.

6. Paper-Making and Paper Product Industry

1. Production of pulp by chemical process with an annual output at the scale of not less than 300,000 tonnes and production of pulp by chemical and mechanical processes with an annual output at the scale of not less than 100,000 tonnes established according to the method of forest-paper integration (limited to equity and cooperative joint ventures).

2. Production of high-grade paper and paperboard (limited to equity and cooperative joint ventures).

7. Petroleum Processing and Coking Industries

1. Processing of needle coke and coal tar into downstream products.

2. Production of asphalt for roads with heavy traffic.

8. Chemical Raw Material and Chemical Product Manufacturing

1. Production of olefin through the catalytic cracking of heavy oil.

2. Annual production at the scale of 600,000 tonnes or more of ethylene (the Chinese party shall hold a relative controlling interest).

3. Comprehensive utilization of ethylene by-products C5-C9 products.

4. Large scale production of PVC resins (by ethylene method).

5. Production of organic chlorine series chemicals (with the exception of products characterized by high organic chlorine residue).

6. Production of basic organic raw materials for the chemical industry such as benzene, methylbenzene,dimethylbenzene and ethylene golycol, and their derivatives.

7. Ancillary raw materials for synthetic materials: production of bisphenol A, 4,4'-diphenylmethane diisocyanate, tolylenediisocyanate.

8. Raw materials for synthetic fibres: production of refined terephthalic acid, acrylonitrile , caprolactam, nylon 66 salt.

9. Synthetic rubber: production of solution styrene butadiene rubber, butyl rubber, isoprene rubber, chloroprene rubber by the butadiene method, polyurethane rubber, acrylic rubber, chlorohydrin rubber.

10. Production of engineering plastics and plastic alloys.

11. Fine chemicals: production of new catalysts, auxiliaries and petroleum additives and new technologies therefor; processing technology for the commercialization of dyes (pigments); high-tech chemicals for use in the electronics and paper-making industries; food and feed additives; leather chemicals; oil field auxiliaries; surfactants; water treatment agents; adhesives; inorganic fibres and inorganic powder stuffing.

12. Production of auxiliaries, oiling agents and dyestuffs for textiles and the spinning of chemical fibres.

13. Production of motor vehicle¹ tail gas purification agents, catalysts and other assistants.

14. Production of natural, compound and mono-isolate flavours.

15. Production of high performance coatings.

16. Production of titanium white by the chlorination method.

17. Production of hydrochlorofluorocarbon substitutes.

18. Large-scale production of coal-based chemicals.

19. Development and production of new forestry chemical products and the development of new technologies therefor.

20. Production of ionic membranes for caustic soda.

21. Production of biological fertilizers, high concentration chemical fertilizers (potassium-based and phosphate-based) and compound fertilizers.

22. Development and production of new varieties of highly effective, low toxicity, low residue crude agrochemicals.

23. Development and production of biological agrochemicals.

24. Development and production of inorganic, organic and biological films for environmental protection purposes.

25. Comprehensive use, treatment and disposal of waste gas, waste liquids and waste residue.

9. Medicine Manufacturing

1. Production of raw pharmaceuticals that are patented in or granted administrative protection by China, and raw chemical pharmaceuticals that need to be imported.

2. Vitamins: production of nicotinic acid.

3. Amino acids: production of serine, tryptophan, histidine, etc.

4. Production of antipyretic analgesics with equipment incorporating new technology.

5. Production of new anti-cancer drugs and new cardio- and cerebro-vascular drugs.

6. Production of new, highly effective and economical contraceptives.

7. Production of new pharmaceuticals using bio-engineering technology.

8. Production of vaccines through genetic engineering (AIDS vaccines, hepatitis C vaccines, contraceptive vaccines, etc.).

9. Development and production of drugs from marine organisms.

10. Production of diagnostic reagents for AIDS, radioimmunity, etc.

11. Pharmaceutical preparations: production of new agents and products that use new technologies such as sustained release, controlled release, targeting, transdermal absorption, etc.

12. Development and application of new types of pharmaceutical adjuvants.

13. Processing and production of materials for traditional Chinese medicines, extracts of traditional Chinese medicines and prepared traditional Chinese medicines (except for traditional preparation skills and technologies for traditional Chinese herbal medicines to be prepared in small pieces for decoction).

14. Production of biomedical materials and products.

15. Production of raw veterinary antibacterial agents (including antibiotics and chemical synthetics).

16. Development and production of veterinary antibacterial drugs, vermifuges, pesticides and coccidiostats, and new forms thereof.

10. Chemical Fibre Manufacturing

1. Production of such high and new technology chemical fibres as differentiated chemical fibres as well as aramid fibres, functional and environmentally friendly polyurethane at an annual output of 5000 tonnes or above, carbon fibres and high-tensile and highly shapeable polyethylene etc.

2. Production of such environmentally friendly chemical fibres as non-toxic viscose filaments.

3. Daily production of 500 tonnes or more of polyester for use other than for fibres, new polyester of fibre grade or for use other than for fibres (polytrimethlene terephthalate, polyethylene naphthalate and poly(butylene terephthalate)).

11. Plastic Manufacturing

1. Production of polyimide freshness-preserving film.

2. Development and production of new mulching film products (photodegradable film, multipurpose film and raw materials, etc.) and the development of new technologies therefor.

3. Breaking down and reuse of waste plastic materials.

12. Non-Metallic Ore Product Industry

1. Production of top-quality float glass at a daily fusion capacity of 500 tonnes or more (limited to Central and Western China).

2. Production of new types of dry cement at a daily output of 2,000 tonnes or more of cement clinker (limited to Central and Western China).

3. Production of glass fibre (direct melting process production lines) and articles of glass-fibre reinforced plastic at an annual output of 10,000 tonnes or more.

4. Annual production of 500,000 pieces or more of high-grade sanitary ware.

5. Standardized fine manufacture of ceramic raw materials and production of high-grade decoration materials for ceramics.

6. Production of high-grade refractory materials for use in glass, ceramics and glass fibre kilns.

7. Production of inorganic non-metallic materials and articles (man-made crystals, high-performance composite materials, special types of glass, special types of ceramics, special types of sealing materials and special types of gelling materials).

8. Production of new types of construction materials (strong, light, multi-purpose wall materials, high-grade, environmentally friendly decoration and finishing materials, fine-quality waterproof sealing materials and highly effective thermal insulation materials).

9. Processing of non-metallic ores (super-fine pulverizing, high purity, fine manufacture, modification) into downstream products.

13. Ferrous Metal Smelting and Rolling

1. Production of direct reduced iron and smelt reduced iron.

14. Non-Ferrous Metal Smelting and Rolling

1. Smelting of low-grade, refractory metallurgical ores (limited to equity and cooperative joint ventures; foreign investors may establish wholly owned enterprises in Western China).

2. Production of hard alloys, tin compounds and antimony compounds.

3. Production of nonferrous composite materials and new alloy materials.

4. Rare earth applications.

15. Metal Product Industry

1. Design and manufacture of moulds for non-metallic articles.

2. Design and manufacture of dies for motor vehicles and motorcycles (including clicker dies, injection moulds, extrusion moulds etc.) and jigs (welding jigs, inspection jigs, etc.).

3. Development and production of high-grade construction hardware and water-heating apparatus and hardware therefor.

16. Common Machinery Manufacturing

1. Manufacture of digitally controlled machine tools with three or more linked axles, digital control systems and server devices.

2. Manufacture of high-performance welding robots and high-efficiency welding equipment.

3. Production of high-heat resistant insulating materials (insulation grade F or H) and shaped insulators.

4. Production of proportional, servo-type hydraulic technologies, low-power pneumatically controlled valves and stuffing static seals.

5. Production of precision dies, precision moulds and standard components for dies.

6. Manufacture of precision bearings and special bearings for various types of principal machines.

7. Manufacture of cast and forged blanks for motor vehicles and motorcycles.

17. Specialized Equipment Manufacturing

1. Development and manufacture of new technologies and equipment for the storage, retention of freshness, grading, packaging, drying, transport and processing of grains, cotton, oil-bearing materials, vegetables, fruits, plants, flowers, herbage, meat products and aquatic products.

2. Manufacture of equipment for protected agriculture.

3. Manufacture of farm and forestry implements incorporating new technology.

4. Design and manufacture of engines used in such farm machinery as tractors, combine harvesters, etc.

5. Manufacture of equipment for the mulching and comprehensive utilization of crop straw.

6. Manufacture of equipment for the comprehensive utilization of agricultural waste and waste from the large-scale raising and breeding of livestock and poultry.

7. Manufacture of water-saving irrigation equipment incorporating new technology.

8. Manufacture of wet land earthwork and dredging machinery.

9. Manufacture of technologies and equipment for the protection of aquatic ecosystems.

10. Manufacture of dispatching system equipment for long-distance water regulation projects.

11. Manufacture of special flood prevention and emergency rescue machinery and equipment.

12. Production of such key food industry equipment as high speed, sterile canning equipment, labelling machines, etc.

13. Manufacture of production technologies and key equipment for amino acids, enzymic preparations, food additives, etc.

14. Production of complete sets of feed processing equipment with a capacity of 10 tonnes/hour or more, and of key parts and components therefor.

15. Manufacture of multicolour offset printing machines for web, and for single sheets of paper larger than folio.

16. Manufacture of leather finishing equipment incorporating new technology.

17. Manufacture of special industrial sewing machines with a high technology content.

18. Manufacture of complete sets of such equipment as new types of looms, new types of paper-making (including pulp-making) machinery, etc.

19. Design and manufacture of new types of highway and port machinery and equipment.

20. Manufacture of equipment for the maintenance and automatic monitoring of highway bridges.

21. Manufacture of equipment for highway tunnel operation monitoring, ventilation, disaster prevention and emergency rescue systems.

22. Design and manufacture of equipment for the large-scale construction and maintenance of railways.

23. Manufacture of landscaping machinery and implements incorporating new technology.

24. Manufacture of special urban environment and sanitation equipment.

25. Manufacture of machinery and equipment for the milling and resurfacing of pavement.

26. Manufacture of tunnel excavators, and of underground excavation equipment for urban underground railways.

27. Manufacture of urban sewage treatment equipment with a capacity of 80,000 tonnes or more per day, industrial wastewater membrane treatment equipment, upstream anaerobic fluidized bed equipment and other equipment for biological treatment of wastewater, waste plastic recycling equipment, desulfurization and denitration equipment for industrial boilers, large bag-type dust collectors resistant to high temperatures and acids and refuse incineration equipment.

28. Manufacture of turbocompressors and mixing granulators forming part of complete sets of equipment with an annual output of 300,000 tonnes or more of synthetic ammonia, 480,000 tonnes or more of urea or 450,000 tonnes or more of ethylene.

29. Manufacture of desulfurization technologies and equipment for fossil-fuel electric power stations.

30. Manufacture of continuous sheet casting machines.

31. Manufacture of technologies and equipment for the processing of plate glass into downstream products.

32. Manufacture of trackless extraction, loading and transportation equipment for use in mine pits; mechanical transmission dumpers for mine use with a capacity of 100 tonnes or more; movable crushers; bucket wheel excavators with a capacity of 3,000 m³/hour or more; loaders for mine use with a capacity of 5 m³ or more; whole-section tunnelers.

33. Design and manufacture of new types of instruments and equipment for petroleum exploration and development.

34. Manufacture of equipment and production of chemicals for the cleaning of mechanically and electrically operated wells.

35. Manufacture of electronic endoscopes.

36. Manufacture of medical X-ray units of 80 kW or more that incorporate high-frequency and direct digital image processing technology and produce low-dosage radiation.

37. Manufacture of high field superconductive MRI apparatus.

38. Manufacture of autopheresis machines.

39. Manufacture of equipment for fully automatic enzyme immunoassay systems (including such functions as specimen feeding, enzyme labelling, template cleaning, incubation, post-data processing, etc.).

40. Manufacture of new technologies and new equipment for controlling the quality of pharmaceuticals.

41. Development and manufacture of new technologies for the analysis of active substances in traditional Chinese medicines, and new processes and new equipment for their extraction.

42. Manufacture of new types of pharmaceutical packaging materials, containers and advanced pharmaceutical manufacturing equipment.

18. Transport Equipment Manufacturing

1. *Manufacture of whole units of motor vehicles¹ (including research and development).

2. Manufacture of motor vehicle¹ engines (including research and development).

3. Manufacture of key parts and components for motor vehicles:¹ disc brake assemblies, drive axle assemblies, automatic transmissions, diesel fuel pumps, induction superchargers for engines, exhaust control devices for engines, electric power steering devices, viscous couplers (for four wheel drives), pneumatic shock absorbers, air spring suspension, hydraulic tappets and instrument combinations.

4. Manufacture of electronic devices for motor vehicles (including control systems for engines, chassis control systems and electronic control systems for automobile bodies).

5. Manufacture of special dedicated vehicles such as desert vehicles exclusively for the petroleum industry.

6. Railway transportation technology and equipment: design and manufacture of locomotives, rolling stock and main parts and components; design and manufacture of line and bridge equipment; technology and equipment manufacture for high-speed railways; manufacture of communication signal equipment and monitoring equipment for transportation safety; manufacture of equipment and materials for electrified railways.

7. Urban rapid railway commuting and transport equipment: design and construction of railcar units and other major components for underground railways and urban light railways.

8. Design and manufacture of civil aircraft (the Chinese party shall hold a controlling interest).

9. Manufacture of parts and components for civil aircraft.

10. Design and manufacture of civil helicopters (the Chinese party shall hold a controlling interest).

11. Design and manufacture of aviation engines (the Chinese party shall hold a controlling interest).

12. Design and manufacture of civil airborne aviation equipment (the Chinese party shall hold a controlling interest).

13. Manufacture of light gas turbines.

14. Design and manufacture of crankshafts for low speed vessel diesel engines.

15. Repair, design and construction of special vessels and high-performance vessels (the Chinese party shall hold a relative controlling interest).

16. Design and manufacture of medium and high speed diesel engines, auxiliary engines, radio communication equipment and navigation equipment for vessels, and components (the Chinese party shall hold a relative controlling interest).

17. Manufacture of fishing vessels and pleasure craft made of glass reinforced plastic.

19. Manufacturing of Electric Machinery and Apparatus

1. Fossil-fuel electric equipment: manufacture of supercritical generating sets of 600,000 kW or more, large gas turbines, combined gas-steam cycle power generating equipment of 100,000 kW or more, integrated gasification combined cycle (IGCC) technology and equipment, pressurized fluidized bed combustion (PFBC) and large cool air generating units of 600,000 kW or more, large circular fluid bed (CFB) boilers of 300,000 kW (limited to equity and cooperative joint ventures).

2. Hydroelectric equipment: large pumped-storage sets of 150,000 kW or more and large through-flow sets of 150,000 kW or more (limited to equity and cooperative joint ventures).

3. Nuclear power sets: manufacture of sets of 600,000 kW or more (limited to equity and cooperative joint ventures).

4. Equipment for the distribution and transformation of electricity: manufacture of ultra-high voltage direct current transmission and transformer equipment of 500 kV or more (limited to equity and cooperative joint ventures).

20. Electronic and Communications Equipment Manufacturing

1. Manufacture of digital televisions, digital camcorders, digital recorders and digital audio equipment.

2. Production of new flat panel monitors, medium and high resolution colour picture tubes/cathode ray tubes and glass bulbs.

3. Production of key components for large screen colour projection monitors such as optical engines, illuminants, projection screens, high-clarity projection ray tubes and liquid crystal on silicon (LCOS) modules.

4. Manufacture of digital audio and video frequency encoding and decoding equipment, digital radio and television studio equipment, digital cable television system equipment, digital audio frequency broadcasting and transmission equipment.

5. Integrated circuit design and large-scale production of integrated circuits with a line width of 0.35 micron or less.

6. Manufacture of large and medium-sized computers, portable microcomputers and high-end servers.

7. Development and manufacture of high-capacity optical and magnetic disk drives and their components.

8. Manufacture of systems for computer assisted design (three-dimensional CAD), computer assisted testing (CAT), computer assisted manufacturing (CAM) and computer assisted engineering (CAE) and other computer application systems.

9. Development and manufacture of software products.

10. Development and production of special materials for semiconductors and components.

11. Manufacture of special equipment, testing instruments, tools and dies for use in electronics.

12. Production of new electronic components (chip components, sensory components and sensors, frequency control and selection components, hybrid integrated circuits, electrical and electronic components, photoelectronic components, new mechanical and electric components).

13. Production of such high-tech environmentally friendly batteries as mercury free alkaline manganese batteries, nickel-hydrogen batteries, lithium-ion batteries, high-capacity sealed maintenance-free lead-acid batteries, fuel cells, cylindrical zinc-air batteries, etc.

14. Development and production of key components for high-density digital optical disk machines.

15. Duplication of read-only optical disks  and production of recordable optical disks.

16. Design and manufacture of civil satellites (the Chinese party shall hold a controlling interest).

17. Manufacture of payloads for civil satellites (the Chinese party shall hold a controlling interest).

18. Manufacture of parts and components for civil satellites.

19. Design and manufacture of civilian carrier rockets (the Chinese party shall hold a controlling interest).

20. Manufacture of equipment for satellite communication systems.

21. Manufacture of satellite navigation positioning receiving equipment and key components (limited to equity and cooperative joint ventures).

22. Manufacture of fibre optic preform rods.

23. Manufacture of digital microwave synchronous series transmission equipment of 622 MB/s or above.

24. Manufacture of optical synchronous series transmission equipment of 10 GB/s or above.

25. Manufacture of broadband information network system access equipment.

26. Manufacture of optical cross connected (OXC) equipment.

27. Manufacture of asynchronous transfer mode (ATM) and IP data communications systems.

28. Manufacture of hand sets, base stations and switching equipment for mobile communications systems (including GSM, CDMA, DCS1800, DECT, IMT2000, etc.) and digital trunking system equipment.

29. Development and manufacture of high-end routers and network switches of 1 GB or more.

30. Manufacture of equipment for air traffic control systems (limited to equity and cooperative joint ventures).

21. Instrument, Meter and Educational and Office Machine Manufacturing

1. Development and production of digital cameras and key components.

2. Development and manufacture of precision on-line measurement instruments.

3. Manufacture of detection instruments, and detection equipment incorporating new technology, in connection with production safety and environmental protection.

4. Manufacture of equipment incorporating new technology for instruments for the on-line monitoring of water quality and flue gas.

5. Manufacture of instruments and equipment for the collection, processing and transmission of hydrologic data and for flood warning.

6. Production of new components and materials for instruments (mainly new switches and functional materials for instruments such as intelligent sensors for instruments, connectors for instruments, flexible circuit boards, photoelectric switches, approach switches etc.).

7. Manufacture of new printing devices (laser, ink jet printers).

8. Maintenance of, and after-sales services for, precision instruments and equipment.

22. Other Manufacturing Industries

1. Development and utilization of products incorporating technology for the cleaning of coal (coal gasification, liquefaction, coal-water slurry, industrial briquettes).

2. Coal extraction and washing, and the comprehensive utilization of pulverized coal ash (including de-sulfurized gypsum), coal gangue, etc.

4.       Electricity, Gas and Water Production and Supply

1. 300,000 kW or more.

2. Construction and operation of power stations using technology for clean burning of coal.

3. Construction and operation of thermo-electric cogeneration power stations.

4. Construction and operation of natural gas power stations.

5. Construction and operation of hydroelectric power stations mainly engaged in the generation of power.

6. Construction and operation of nuclear power stations (the Chinese party shall hold a controlling interest).

7. Construction and operation of power stations using new sources of energy (including solar energy, wind energy, magnetic energy, geothermal energy, tidal energy, biomass energy, etc.).

8. Construction and operation of urban water supply plants.

5.       Water Conservancy

1. Construction and operation of comprehensive water conservancy hubs (the Chinese party shall hold a relative controlling interest).

6.       Communications, Transportation, Warehousing, Postal and Telecommunications Services

1. Construction and operation of railway main-line networks (the Chinese party shall hold a controlling interest).

2. Construction and operation of branch lines, local railways and their bridges, tunnels and ferry facilities (limited to equity and cooperative joint ventures).

3. Construction and operation of highways, independent bridges and tunnels.

4. Construction and operation of the public terminal facilities of ports.

5. Construction and operation of civil airports (the Chinese party shall hold a relative controlling interest).

6. Air transport companies (the Chinese party shall hold a controlling interest).

7. Airline companies for agriculture, forestry and fisheries (limited to equity and cooperative joint ventures)

8. *Scheduled and tramp international maritime transport services.

9. *International multi-modal container transport services.

10. *Road freight transportation companies.

11. Construction and operation of oil (gas) pipelines, oil (gas) depots and dedicated oil jetties.

12. Construction and operation of coal pipeline transportation facilities.

13. Construction and operation of transport business related warehousing facilities.

7.       Wholesale and Retail Trade

1. *Wholesale and retail of logistics for, and distribution of, general merchandise.

8.       Real Estate Industry

1. Development and construction of ordinary residential premises.

9.       Social Services

1. Public Utilities

1. Construction and operation of closed urban streets.  

2. Construction and operation of urban underground railways and light railways (the Chinese party shall hold a controlling interest).

3. Construction and operation of sewage and garbage treatment plants, hazardous waste treatment and disposal plants (incinerators and landfills) and facilities for the prevention and control of environmental pollution.

2. Information and Consultancy Services

1. International economic, scientific, technological and environmental protection information and consultancy services.

2. *Accounting and auditing.

10.     Sanitation, Fitness and Social Welfare Industries

1. Services to the elderly and disabled

11.     Education, Culture, Art, Radio, Film and Television Industries

1. Institutes of higher learning (limited to equity and cooperative joint ventures).

12.     Scientific Research and Comprehensive Technical Services

1. Bio-engineering and biomedical engineering technology.  

2. Isotopic, radiation and laser technology.

3. Technology for marine development and marine energy development.

4. Technology for the desalination and utilization of sea water.

5. Marine monitoring technology.

6. Development technology for the saving of energy.

7. Technology for the renewal and comprehensive utilization of resources.

8. Technology for the prevention, treatment and monitoring of environmental pollution.

9. Technology for the prevention of desertification and the treatment of deserts.

10. Application technologies for civil satellites.

11. Research and development centres.

12. Centres for the development of high and new technologies and new products, and the development of enterprises.

13.     Foreign-funded Projects in Permitted Categories That Directly Export All of Their Products

CATALOGUE OF INDUSTRIES IN WHICH FOREIGN INVESTMENT IS RESTRICTED

1.       Agriculture, Forestry, Animal Husbandry and Fisheries

1. Development and production of grains (including potatoes), cotton and oil-bearing crop seeds (the Chinese party shall hold a controlling interest).

2. Processing of logs from precious varieties of trees (limited to equity and cooperative joint ventures).

2.       Mining

1. Exploration for, and mining of, ores of tungsten, tin, antimony, molybdenum, barite, fluorspar, etc. (limited to equity and cooperative joint ventures).

2. Exploration for, and mining of, precious metals (gold, silver, and platinum family).

3. Exploration for, and mining of, precious non-metallic ores such as diamonds.

4. Exploration for and mining of special and rare types of coal (the Chinese party shall hold a controlling interest).

5. Mining of szaibelyite and ludwigite.

6. Mining of celestite.

3.      Manufacturing

1. Food Processing

1. Production of yellow rice or millet wine, and famous and fine white spirits.

2. Production of foreign brand carbonated beverages.

3. Production of artificial sweeteners such as saccharin, etc.

4. Processing of oils and fats.

2. Tobacco Processing

1. Production of cigarettes and filter tips.

3. Textile Industry

1. Wool weaving, cotton weaving.

2. Silk reeling.

4. Printing and Reproduction Industry

1. Printing of publications (the Chinese party shall have a controlling interest, except in the printing of package dressing).

5. Petroleum Processing and Coking Industries

1. Construction and operation of oil refineries.

6. Chemical Raw Material and Chemical Product Manufacturing

1. Production of ionic membrane caustic soda.

2. Production of photosensitive materials.

3. Production of benzidine.

4. Production of chemicals that can readily be used in the production of narcotics (ephedrine, 3,4-methylenedioxy-phenyl-2-propanone, phenyl acetic acid, 1-phenyl-2-propanone, piperonal, safrole, isosafrole, acetic anhydride).

5. Production of titanium white using the sulphuric acid-method.

6. Processing of ludwigite.

7. Production of barium salts.

7. Medicine Manufacturing

1. Production of chloromycetin, penicillin G, lincomycin, gentamycin, dihydrostreptomycin, amikacin, tetracycline hydrochloride, terramycin, midecamycin, kitasamycin, ciprofloxacin, norfloxacin and ofloxacin.

2. Production of analgin, paracetamol, vitamin B1, vitamin B2, vitamin C and vitamin E.

3. Production of vaccines, bacterial vaccines, antitoxins and toxoids within the State's immunization plan (BCG vaccine and poliomyelitis vaccine, DPT vaccine and vaccines against measles, encephalitis B, epidemic encephalitis, etc.).

4. Production of raw pharmaceutical materials for addictive narcotics and psychotropics (the Chinese party shall hold a controlling interest).

5. Production of blood products.

6. Production of non-self decomposing disposable syringes, infusion apparatuses, blood transfusion apparatuses and blood bags.

8. Chemical Fibre Manufacturing

1. Production of chemical fibres from conventional chip-spinning.

2. Production of viscose staple fibres with a single line capacity of less than 20,000 tonnes/year.

3. Daily production of 400 tonnes or less of polyester of fibre-grade or for use other than fibres, production of polyurethane.

9. Rubber Manufacturing

1. Retreading of cross-ply tires and old tires (except radial-ply tires), and production of low-performance industrial rubber components.

10. Non-Ferrous Metal Smelting and Rolling

1. Smelting and separation of rare earth (limited to equity and cooperative joint ventures).

11. Common Machine Manufacturing

1. Production of containers.

2. Production of small and medium-sized ordinary bearings.

3. Manufacture of truck cranes of less than 50 tonnes (limited to equity and cooperative joint ventures).

12. Specialized Equipment Manufacturing

1. Manufacture of middle- and low-grade B-type ultrasound scanners.

2. Manufacture of equipment for ordinary polyester filament yarn and staple fibres.

3. Manufacture of caterpillar bulldozers of less than 320 HP and wheeled loaders of less than 3 m³ (limited to equity and cooperative joint ventures).

13. Electronic and Communications Equipment Manufacturing

1. Production of satellite television receivers and key parts.

4.       Electricity, Gas and Water Production and Supply

1. Construction and operation of conventional coal burning power stations (mainly engaged in the generation of power) with a single generator capacity of 300,000 kW or less (except small power grids).

5.       Communications, Transportation, Warehousing, Postal and Telecommunications Services

1. Companies engaged in the transportation of passengers by road.

2. *Cross-border motor vehicle transportation companies.

3. *Companies engaged in transportation by water.

4. *Rail freight transportation companies.

5. Companies engaged in the transportation of passengers by rail (the Chinese party shall hold a controlling interest).

6. General airline companies for photography, prospecting, industry, etc. (the Chinese party shall hold a controlling interest).

7. *Telecommunications companies.

6.       Wholesale and Retail Trade

1. *Companies engaged in various kinds of commerce such as those engaged in merchandise trading, direct sale, mail order, online sale, franchising, entrusted operation, sales agency, business management, etc. as well as the wholesale and retail of, logistics for and distribution of, cereals, cotton, vegetable oils, edible sugars, pharmaceutical products, tobacco, motor vehicles, crude oil and means of agricultural production.

2. *Wholesale and retail of books, newspapers and periodicals.

3. *Distribution of audio and video products (excluding motion pictures)

4. Auctioning of goods.

5. *Goods rental and leasing companies.

6. *Agency companies (vessels, freight forwarding, foreign vessel cargo handling, advertising, etc.).

7. *Wholesale of processed oil and the construction and operation of gas stations.

8. Foreign trade companies.

7.       Banking and Insurance Industries

1. Banks, finance companies, trust and investment companies.

2. *Insurance companies.

3. *Securities companies, securities investment fund management companies.

4. Lease-financing companies.

5. Foreign exchange brokers.

6. *Insurance brokerage companies.

8.       Real Estate Industry

1. Development of large tracts of land (limited to equity and cooperative joint ventures).

2. Construction and operation of high-class hotels, villas, high-grade office buildings and international conference centres.

3. Construction and operation of large theme parks.

9.       Social Services

1. Public Utilities

1. Construction and operation of gas, heat and water supply and drainage pipe networks in medium and large sized cities (the Chinese party shall have a controlling interest).

2. Information and Consultancy Services

1. Legal consultancy.

2. Market research (limited to equity and cooperative joint ventures).

10.     Sanitation, Fitness and Social Welfare Industries

1. Medical institutions (limited to equity and cooperative joint ventures).

2. Construction and operation of golf courses.

11.     Education, Culture, Art, Radio, Film and Television Industries

1. Senior high school level educational institutions (limited to equity and cooperative joint ventures).

2. Construction and operation of movie theatres (the Chinese party shall hold a controlling interest).

3. Production and distribution of radio and television programmes, and production of films (the Chinese party shall hold a controlling interest).

12.    Scientific Research and Comprehensive Technical Services

1. Surveying companies (the Chinese party shall hold a controlling interest).

2. *Companies engaged in the inspection, appraisal and certification of import and export goods.

13.     Other Industries That Are Restricted by the State or by International Treaties Concluded or Acceded to by China

CATALOGUE OF INDUSTRIES IN WHICH FOREIGN INVESTMENT IS PROHIBITED

1.       Agriculture, Forestry, Animal Husbandry and Fisheries

1. Breeding and growing of precious, high-quality breeds that are rare in China (including high-quality genes from the crop and plant cultivation industry, the animal husbandry industry and the aquatic products industry).

2. Production and development of transgenic plant seeds.

3. Aquatic animal and plant fishing and dredging in China's marine jurisdictional waters and inland waters.

2.       Mining

1. Exploration for, and mining and dressing of, radioactive minerals.

2. Exploration for, and mining and dressing of, rare earth.

3.       Manufacturing

1. Food processing

1. Processing of green teas and specialty teas using traditional Chinese processes (famous teas, fermented dark tea, etc.).

2. Medicine manufacturing

1. Processing of traditional Chinese medicinal materials listed as natural resources protected by the State (musk, licorice root, jute, etc.).

2. Application of traditional preparation technologies for traditional Chinese herbal medicines to be prepared in small pieces for decoction, and production of traditional Chinese medicinal products prepared by means of secret Chinese recipes.

3. Non-ferrous metal smelting and rolling

1. Smelting and processing of radioactive minerals.

4. Arms and ammunition manufacturing

5. Other manufacturing industries

1. Ivory carving.

2. Processing of tiger bones.

3. Production of bodiless lacquerware.

4. Production of enamelware.

5. Production of xuan paper, and ingot-shaped ink tablets.

6. Production of products that cause cancer, deformity or mutation or that are long-term organic pollutants.

4.       Electricity, Gas and Water Production and Supply

1. Construction and operation of power grids.

5.       Communications, Transportation, Warehousing, Postal and Telecommunications Services

1. Air traffic control companies.

2. Postal service companies.

6.       Finance and Insurance

1. Futures companies

7.       Social Services

1. Development of wild plant and animal resources protected by the State.

2. Construction and operation of nature reserves for flora and fauna.

3. Social research

4. Gaming industry (including horse racetracks that offer betting).

5. Sex industry.

8.       Education, Culture, Art, Radio, Film and Television Industries

1. Basic education (compulsory education) institutions.

2. Publication, general distribution and import of books, newspapers and periodicals.

3. Publication, production, general distribution and import of audio and video products and electronic publications.

4. News organizations.

5. Radio stations, television stations, radio and television transmission coverage networks (transmission stations, relay stations, radio and television satellites, satellite uplink stations, satellite reception and relay stations, microwave stations, monitoring stations and cable radio and television transmission coverage networks) at all levels.

6. Companies engaged in the publication or broadcasting of radio or television programmes.

7. Distribution of motion pictures.

8. Video screening companies.

9.       Other Industries

1. Projects that jeopardize the safety and efficient use of military facilities.

10.     Other Industries That Are Prohibited by the State or by International Treaties Concluded or Acceded to by China.

Note:

1. Where stipulations in the Mainland/Hong Kong Closer Economic Partnership Arrangement and its supplementary agreement and the Mainland/Macao Closer Economic Partnership Arrangement and its supplementary agreement provide otherwise, such stipulations shall prevail.

2. Items marked with an asterisk are connected to the commitments made by China when acceding to the World Trade Organization. See the Annex for specific details.

ANNEX TO THE FOREIGN INVESTMENT INDUSTRIAL GUIDANCE CATALOGUE

1.       Encouraged Category

1. Risk exploration and development of petroleum and natural gas: limited to cooperation.

2. Development of oil/gas pools (fields) in low-permeability formations: limited to cooperation.

3. Development and application of new technologies for increasing the crude oil recovery factor: limited to cooperation.

4. Development and application of new technologies for petroleum exploration and development such as geophysical prospecting, drilling, logging, downhole operations, etc.: limited to cooperation.

5. Manufacture of whole units of motor vehicles and motorcycles: foreign investment ratio may not exceed 50%.

6. Scheduled and tramp international maritime transport: foreign investment ratio may not exceed 49%.

7. International multi-modal transport of containers: foreign investment ratio may not exceed 50%; by 11 December 2002, foreign investors will be permitted to hold controlling interests; by 11 December 2005, foreign investors will be permitted to establish wholly owned enterprises.

8. Road freight transportation companies: by 11 December 2002, foreign investors will be permitted to hold controlling interests; by 11 December 2004, foreign investors will be permitted to establish wholly owned enterprises.

9. Wholesale and retail of, logistics for and distribution of, general merchandise: for limitations, see Section Five of the Restricted Category.

10. Accounting and auditing: limited to cooperative joint ventures and partnerships.

2.       Restricted Category

1. Cross-border motor vehicle transportation companies: by 11 December 2002, foreign investors will be permitted to hold controlling interests; by 11 December 2004, foreign investors will be permitted to establish wholly owned enterprises.

2. Companies engaged in transportation by water: foreign investment ratio may not exceed 49%.  

3. Rail freight transportation companies: foreign investment ratio may not exceed 49%; by 11 December 2004, foreign investors will be permitted to hold controlling interests; by 11 December 2007, wholly foreign-owned enterprises will be permitted.

4. Telecommunications companies

1. Value-added telecommunications services and paging services (the latter being part of basic telecommunications services): by 11 December 2001, foreign investment will be permitted, but the foreign investment ratio may not exceed 30%; by 11 December 2002, the foreign investment ratio will not be permitted to exceed 49%; by 11 December 2003, the permitted foreign investment ratio will reach 50%.

2. Mobile voice and data services (being part of basic telecommunications services): by 11 December 2001, foreign investment will be permitted, but the foreign investment ratio may not exceed 25%; by 11 December 2002, the foreign investment ratio may not exceed 35%; by 11 December 2004, the permitted foreign investment ratio will reach 49%.

3. Domestic services and international services (being part of basic telecommunications services): by 11 December 2004, foreign investment will be permitted, but the foreign investment ratio may not exceed 25%; by 11 December 2006, the foreign investment ratio will not be permitted to exceed 35%; by 11 December 2007, the permitted foreign investment ratio will reach 49%.

5. Companies engaged in various kinds of commerce such as those engaged in merchandise trading, direct sale, mail order, online sale, franchising, entrusted operation, sales agency, business management, etc.; as well as the wholesale and retail of, logistics for and distribution of, cereals, cotton, vegetable oils, edible sugars, pharmaceutical products, tobacco, motor vehicles, crude oil and means of agricultural production; wholesale and retail of books, newspapers and periodicals; wholesale of processed oil and the construction and operation of gas stations.

1. Commission agency and wholesale (excluding salt and tobacco): by 11 December 2002, foreign investment with foreign capital contributions of up to 50% will be permitted, but foreign- invested enterprises will not be permitted to deal in books, newspapers, magazines, pharmaceutical products, agrochemicals, mulching films, chemical fertilizers, processed oil and crude oil; by 11 December 2003, foreign investors will be permitted to hold controlling interests; by 11 December 2004, foreign investors will be permitted to establish wholly owned enterprises, and foreign-invested enterprises will be permitted to deal in books, newspapers, magazines, pharmaceutical products, agrochemicals and mulching films; by 11 December 2006, foreign- invested enterprises will be permitted to deal in chemical fertilizers, processed oil and crude oil.

2. Retail (excluding tobacco): foreign investment will be permitted, but foreign-invested enterprises will not be permitted to deal in books, newspapers, magazines, pharmaceutical products, agrochemicals, mulching films, chemical fertilizers and processed oil; by 11 December 2002, foreign capital contributions of up to 50% will be permitted and foreign- invested enterprises will be permitted to deal in books, newspapers and magazines; by 11 December 2003, foreign investors will be permitted to hold controlling interests; by 11 December 2004, foreign investors will be permitted to establish wholly owned enterprises, and foreign-invested enterprises will be permitted to deal in pharmaceutical products, agrochemicals, mulching films and processed oil; by 11 December 2006, foreign-invested enterprises will be permitted to deal in chemical fertilizers.  Foreign investors will not be permitted to hold controlling interests in chain stores if such stores have more than 30 outlets and the products they deal in include motor vehicles (the limitation on which will be lifted by 11 December 2006), books, newspapers, magazines, pharmaceutical products, agrochemicals, mulching films, processed oil, chemical fertilizers, cereals, vegetable oils, edible sugars, tobacco or² cotton.

3. Franchising, and wholesale and retail away from a fixed location: foreign investment will be permitted by 11 December 2004.

6. Distribution of audio and video products (excluding motion pictures): limited to cooperation and the Chinese party's holding of a controlling interest.

7. Goods rental and leasing companies: by 11 December 2002, foreign investors will be permitted to hold controlling interests; by 11 December 2004, wholly foreign-owned enterprises will be permitted.

8. Agency companies

1. Vessels: foreign investment ratio may not exceed 49%.

2. Freight forwarding (excluding services specifically reserved to postal authorities): foreign investment ratio may not exceed 50% (in the case of courier services, it may not exceed 49%); by 11 December 2002, foreign investors will be permitted to hold controlling interests; by 11 December 2005, wholly foreign-owned enterprises will be permitted.

3. Foreign vessel cargo handling: limited to equity and cooperative joint ventures.

4. Advertising: foreign investment ratio may not exceed 49%; by 11 December 2003, foreign investors will be permitted to hold controlling interests; by 11 December 2005, wholly foreign-owned enterprises will be permitted.

9. Insurance companies

1. Non-life insurance companies: foreign investment ratio may not exceed 51%; by 11 December 2003, wholly foreign-owned enterprises will be permitted.

2. Life insurance companies: foreign investment ratio may not exceed 50%.

10. Securities companies and securities investment fund management companies

1. Securities companies: by 11 December 2004, foreign investment will be permitted, but the foreign investment ratio may not exceed one-third.

2. Securities investment fund management companies: foreign investment is permitted, but the foreign investment ratio may not exceed 33%; by 11 December 2004, the permitted foreign investment ratio will reach 49%.

11. Insurance brokerages: foreign investment ratio may not exceed 50%; by 11 December 2004, the permitted foreign investment ratio will reach 51%; by 11 December 2006, wholly foreign-owned enterprises will be permitted.

12. Inspection, appraisal and certification of import and export goods: by 11 December 2003, foreign investors will be permitted to hold controlling interests; by 11 December 2005, wholly foreign-owned enterprises will be permitted.

Translator's notes:

1. According to our understanding, the term "motor vehicles" as used here does not include motorcycles.

2. The Chinese text could also be interpreted as "and" rather than "or".