· Document Number：No. 19 [2018] of the State Council

· Area of Law： Foreign-funded Enterprises

· Level of Authority： Regulatory Documents of the State Council

· Date issued：06-10-2018

· Effective Date：06-10-2018

· Issuing Authority： State Council

· Status： Effective

Notice of the State Council on Certain Measures for Actively and Effectively Utilizing Foreign Investment to Promote Quality Economic Development
(No. 19 [2018] of the State Council)
The people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government; all ministries and commissions of the State Council; and all institutions directly under the State Council:
The utilization of foreign investment is an important part of China's basic national policy of opening up and the building of a new open economic system. To date, China's economy has shifted from a high-speed growth stage to a quality development stage, and the utilization of foreign investment has been confronted with new situations and new challenges. For the purposes of implementing the decisions and arrangements of the CPC Central Committee and the State Council on promoting the formation of a new pattern of comprehensive opening up, carrying out a high-level investment liberalization and facilitation policy, being benchmarked against international advanced standards, creating a more fair, transparent, facilitating, and attractive investment environment, maintaining China's status as the main destination of foreign investment in the world, further boosting the steady growth of foreign investment, and achieving quality opening up to stimulate quality economic development, the relevant matters are hereby notified as follows:
I. Significantly relaxing market access and raising the level of investment liberalization
1. Fully implementing the pre-access national treatment plus negative list administration system. The special management measures (negative lists) for the access of foreign investment across the country and in free trade pilot zones shall be revised before July 1, 2018, benchmarked against internationally accepted rules, so as to comprehensively raise the level of opening up and promote reform, development, and innovation by opening up. With respect to fields not on the negative lists, no authority or region may specially limit the access of foreign investment. (The National Development and Reform Commission and the Ministry of Commerce shall take the lead, and all relevant authorities and all provincial people's governments shall be responsible according to the division of labor based on duties)
2. Steadily further opening up the financial industry. The restrictions on the establishment of foreign-funded financial institutions shall be relaxed, the scope of business in China of foreign-funded financial institutions shall be expanded, and the fields for cooperation between Chinese and foreign financial markets shall be broadened. The rules relating to Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional Investors (RQFII) shall be revised and improved, and a qualified foreign investor system that is open, transparent, easy to operate and risk-controllable shall be established and improved, so as to attract more long-term overseas funds to be invested in domestic capital markets. The construction of crude oil futures markets shall be vigorously advanced, and the introduction of overseas traders to participate in the trading in futures such as iron ore shall be actively forwarded. The reform of the regulation of overseas listing shall be deepened, qualified domestic enterprises shall be supported in going public overseas, and it shall be advanced in a sound and orderly manner that the unlisted shares of overseas listed companies are listed and traded in the overseas market. Foreign financial institutions shall be supported in participating more in the underwriting of local government bonds. (The Ministry of Finance, the Ministry of Commerce, the People's Bank of China, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission shall be responsible according to the division of labor based on duties)
3. Continuing to advance the opening up of the service industry. The restrictions on the access of foreign investment in transport, trade logistics, professional services, and other fields shall be canceled or relaxed. The stress testing in respect to the opening up of telecommunications, culture, tourism, and other fields within pilot free trade zones shall be intensified. (The Publicity Department of the CPC Central Committee, the Office of the Central Cyberspace Affairs Commission, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Transport, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, the Ministry of Culture and Tourism, the State Grain and Reserves Administration, and other relevant authorities shall be responsible according to the division of labor based on duties)
4. Deepening the opening up of agriculture, mining and manufacturing. The restrictions on the access of foreign investment in the seed industry and other agricultural fields; coal, non-metallic minerals, and other mining fields; and vehicles, ships, aircrafts, and other manufacturing fields shall be canceled or relaxed. (The National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Natural Resources, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, and other relevant authorities shall be responsible according to the division of labor based on duties)
II. Deepening the reform of simplification of administrative procedures, devolution of powers, combination of devolution and regulation, and optimization of services and improving investment facilitation
5. Continuing to advance the reform of simplification of administrative procedures, devolution of powers, combination of devolution and regulation, and optimization of services in the foreign investment field. The establishment or modification of a foreign-funded enterprise with a total investment of less than USD1 billion on a negative list for the access of foreign investment shall be subject to the approval and administration by the provincial people's government. Local governments shall be supported in carrying out pilot reforms of the reform of relatively centralized administrative licensing power. "One-window processing" of the commercial filing and commercial and commercial registration of foreign-funded enterprises in fields not on the negative lists shall be promoted across the country. (The Ministry of Commerce, the State Administration of Market Regulation, and other relevant authorities and all provincial people's governments shall be responsible according to the division of labor based on duties)
6. Improving the facilitation of use of funds by foreign-funded enterprises. The management of the cash pools shall be further simplified, and banks shall be allowed to review authentic and legal electronic documents and transact centralized foreign exchange payment-on-behalf and receipt-on-behalf and payment and net settlement business. The conditions for filing of enterprises launching pilot programs of centralized operation and management of foreign exchange funds of multinational corporations shall be relaxed. Multinational enterprise groups shall be supported in transacting RMB two-way cross-border cash pooling business. (The People's Bank and the State Administration of Foreign Exchange shall be responsible according to the division of labor based on duties)
7. Enhancing the facilitation of foreign talents working in China. The issuance of support policies shall be researched, and it shall be ensured according to the law that foreign talents working in China enjoy basic public services. Foreign talents of whom enterprises registered in China, in line with the national support orientation, are in urgent need shall be provided with more convenient foreigner work permit management services. The pilot program of "all-in card" services for high-end foreign talents shall be actively advanced, and the procedures for processing work permits shall be further streamlined. (The Ministry of Foreign Affairs, the Ministry of Justice, the Ministry of Human Resources and Social Security, the State Administration of Foreign Experts Affairs, and other relevant authorities shall be responsible according to the division of labor based on duties)
8. Enhancing the facilitation of entry and exit of foreign talents. A foreign talent, employed by an enterprise registered in China, who meets the conditions as provided in the measures for the implementation of foreign talent visas, may apply for a talent visa, valid for five to ten years, allowing multiple entry, and with the duration of each stay not exceeding 180 days, by recognition of high-end foreign talent, to a Chinese embassy, consulate or any other overseas institution authorized by the Ministry of Foreign Affairs, be exempt from visa fees and urgent fees, and receive the visa within two working days. (The Ministry of Foreign Affairs, the State Administration of Foreign Experts Affairs, and other relevant authorities shall be responsible according to the division of labor based on duties)
III. Strengthening investment promotion and improving or raising the quality and level of introduced investment
9. Optimizing the direction of foreign investment. Foreign investment, advanced technology, and management experience shall be vigorously attracted, foreign investors shall be supported in participating in the construction of the free trade port in Hainan in all aspects, and the pioneering role of pilot free trade zones in the aspects of expanding opening up and attracting foreign investment shall be enhanced. (The Ministry of Commerce shall take the lead, and the member entities of the Inter-Ministerial Joint Meeting for Pilot Free Trade Zone Work of the State Council shall be responsible according to the division of labor based on duties) Foreign investors shall be guided in investing more in modern agriculture, ecological construction, advanced manufacturing, and modern services and in central and western China. The tax policies for tax credits with respect to overseas income of enterprises, overseas investors directly investing domestic profits, and technologically advanced service enterprises shall be further executed. (The National Development and Reform Commission, the Ministry of Finance, the Ministry of Commerce and the State Administration of Taxation shall be responsible according to the division of labor based on duties)
10. Supporting the innovative development of foreign investment. The support policies for foreign-funded research and development centers shall be vigorously implemented, the adjustment and optimization of determination criteria shall be researched, and foreign-funded enterprises shall be encouraged to intensify their research and development efforts in China. The high-tech enterprise policy shall be further implemented, and foreign investors shall be encouraged to invest in high-tech fields. (The Ministry of Science and Technology, the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs, and the State Administration of Taxation shall be responsible according to the division of labor based on duties)
11. Encouraging foreign investment in mergers and acquisitions. Local governments shall encouraged to establish a mergers and acquisitions database according to market-oriented principles and guide domestic enterprises in actively participating in international cooperation. Qualified foreign natural person investors shall be allowed to invest in domestic listed companies according to the law. By analogy to the rules relating to listed companies, foreign investors shall be allowed to invest in the companies quoted at the National Equities Exchange and Quotations. The supervision and management system of state-owned shares in listed companies shall be improved, the openness and transparency of state-controlled listed companies and the marketing of their state-owned shares shall be further heightened, and qualified domestic and foreign investors shall be provided with fair opportunities to participate in the reform of state-owned enterprises. (The National Development and Reform Commission, the Ministry of Commerce, the State-Owned Assets Supervision and Administration Commission of the State Council, the China Securities Regulatory Commission, and other relevant authorities and all provincial people's governments shall be responsible according to the division of labor based on duties)
12. Reducing the operating costs of foreign-funded enterprises. All regions shall be allowed to support manufacturing enterprises in adding stories to plant buildings, renovating plant areas, consolidating internal land, and expanding production and warehousing venues in accordance with the law and procedures, improve intensive land use, and cease additionally charging land premiums. Foreign-funded enterprises shall be supported in scientifically using labor services and meet the flexible demand for labor services by executing labor contracts subject to a term of accomplishing certain work tasks and short-term labor contracts. The approval process of the applications from foreign-funded enterprises for the implementation of the consolidated working hours calculation system and the flexible work hour system shall be improved, and the time limit for approval shall be shortened. The advancement of the negotiation and execution of bilateral and multilateral social security agreements shall be accelerated, the obligations under the executed social security agreements shall be earnestly fulfilled, the social security interests of foreign workers in China shall be maintained according to the agreements, and enterprises and employees shall be freed from the double payment obligations with respect to social insurances as stipulated in the agreements. (The Ministry of Human Resources and Social Security, the Ministry of Natural Resources, and the Ministry of Housing and Urban-Rural Development shall be responsible according to the division of labor based on duties)
13. Intensifying investment promotion efforts. All regions shall be encouraged to provide funding support for investment promotion, strengthen performance appraisal, and improve incentive mechanisms. All regions shall be supported in formulating earmarked policies within their statutory remit and rewarding foreign-funded enterprises and high-level talents who have made outstanding contributions to economic and social development. The policies relating to the management of temporary overseas business travels shall be leveraged to facilitate major project negotiations, major investment promotion campaigns, and other business visiting groups. All regions shall, in the course of attracting businesses and investment, abide by national industry policies, land use policies, urban and rural plans, environmental protection, and other requirements, pay attention to comprehensively improving the business environment, give fair treatment to enterprises, whether Chinese-funded or foreign-funded, and avoid vicious competition. (The Foreign Affairs Office of the CPC Central Committee, the Ministry of Foreign Affairs, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Natural Resources, the Ministry of Ecology and Environment, the Ministry of Commerce, the State Administration of Foreign Experts Affairs, and all provincial people's governments shall be responsible according to the division of labor based on duties)
IV. Tightening investment protection and creating a high-standard investment environment
14. Strengthening the protection of intellectual property rights. The revision of relevant laws and regulations such as the Patent Law shall be advanced, and the statutory cap on compensation for infringement of intellectual property rights shall be substantially increased. Infringement and counterfeiting shall be severely cracked down on, and the punishment of infringement of trade secrets, unfair competition by malicious preemptive registration or confusion of business marks, infringement and counterfeiting of patents, online piracy and infringement, and other illegal acts of infringement of intellectual property rights, which many foreign-funded enterprises report, shall be tightened. China's commitment when joining the World Trade Organization shall be strictly fulfilled, the conditions for technical cooperation in the course of foreign investment shall be negotiated by the parties to the investment, and no employee of the people's government at each level shall compel technology transfer by administrative means. Enforcement assistance and arbitration of and mediation in disputes shall be strengthened, the pilot program of arbitration of and mediation in disputes shall be advanced, and the improvement of the intellectual property protection system shall be promoted. (The Publicity Department of the CPC Central Committee, the Supreme People's Court, the Office of the National Leading Group on the Fight against IPR Infringement and Counterfeiting, the Ministry of Justice, the State Administration of Market Regulation, and the State Intellectual Property Office shall be responsible according to the division of labor based on duties)
15. Protecting the lawful interests of foreign investment. The inter-ministerial joint meeting system for complaints from foreign-funded enterprises shall be improved, and the resolution of system and policy issues involving the power of the Central Government shall be coordinated. Working mechanisms for complaints from foreign-funded enterprises in all regions shall be established and improved, and all authorities shall strengthen the guidance and supervision of their local counterparts, so as to promptly resolve the problems of unfair treatment reported by foreign-funded enterprises. All regions shall not restrict the lawful and cross-border operation, relocation, deregistration, and other conduct of foreign-funded enterprises. (The Ministry of Commerce shall take the lead, and the relevant authorities and all provincial people's governments shall be responsible according to the division of labor based on duties)
V. Optimizing the regional opening-up layout and guiding foreign investment into central and western China
16. Broadening the financing channels for foreign-funded enterprises. Foreign-funded enterprises in western China and the old industrial bases in northeast China shall be allowed to issue RMB or foreign currency bonds abroad and remit back the funds raised in full for the investment and operations in the provinces where they operate. Within the framework of macro-prudential management of all-standard cross-border financing, the financial institutions or asset management companies established with approval in said regions shall be supported in transferring RMB non-performing obligations to foreign investors in accordance with the requirements of system soundness and risk controllability; and on the basis of full assessment, the banking institutions in said regions shall be allowed to transfer the RMB trade financing assets held by them to overseas banks. (The National Development and Reform Commission, the Ministry of Finance, the People's Bank of China, the China Banking and Insurance Regulatory Commission, and the State Administration of Foreign Exchange shall be responsible according to the division of labor based on duties)
17. Reducing the logistics costs of foreign-funded enterprises. Joint open land and air ports and multimodal transport hubs shall be established in central and western China and the old industrial base in northeast China, and the development of combined river and sea, rail and air, and rail and water transport shall be accelerated. An increase in international and domestic routes and flights in central and western China and the old industrial base in northeast China shall be supported. The construction of infrastructure such as yards, stations, and passages for China-Europe railways shall be strengthened, the development environment for China-Europe railways shall be optimized, and the cost reduction and efficiency improvement of China-Europe railways shall be promoted. The market regulatory mechanism shall be improved, the transportation structure shall be adjusted, transportation efficiency shall be raised, and the regulation of charges collection in highway, rail, aviation, water transportation, and other fields shall be tightened, and the logistics costs in western China shall be further cut. (The National Development and Reform Commission, the Ministry of Transport, the General Administration of Customs, the State Administration of Market Regulation, the National Railway Administration, the Civil Aviation Administration of China, and the China Railway Corporation shall be responsible according to the division of labor based on duties)
18. Accelerating the construction of priority border regions for investment attraction. Local governments shall be encouraged to coordinate the relevant subsidies from the Central Government and their own financial resources to support the construction of border economic cooperation zones, cross-border economic cooperation zones, and border tourism pilot zones. Policy and development financial institutions shall be encouraged, within their scope of business, to increase the credit support for enterprises in border economic cooperation zones and cross-border economic cooperation zones. Qualified domestic and foreign enterprises whose places of registration and main places of production are both in border economic cooperation zones or cross-border economic cooperation zones shall be actively supported in applying for initial public offering of shares and going public. (The Ministry of Finance, the Ministry of Commerce, the Ministry of Culture and Tourism, the People's Bank, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and all provincial people's governments shall be responsible according to the division of labor based on duties)
19. Building up a new vehicle for investment cooperation in western China. Certain international cooperation parks playing demonstration and leading role shall be planned and built in qualified regions according to high standards, the pilot program of exploring joint and overall development by Chinese and foreign enterprises, institutions, and government agencies shall be launched, and parks shall be shall be supported in conducting pilot programs in the aspect of facilitation of entry and exit in fields such as international capital, talents, institutions, and services. (The Office of the Central Leading Group for Financial and Economic Affairs, the Ministry of Foreign Affairs, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Human Resources and Social Security, the Ministry of Commerce, the People's Bank of China, the General Administration of Customs, the State Administration of Market Regulation, the State Administration of Foreign Experts Affairs, and other relevant authorities and provincial people's governments shall be responsible according to the division of labor based on duties)
VI. Driving the improvement of national development zones and strengthening the role of important platforms for utilizing foreign investment
20. Promoting development zones in optimizing the comprehensive services for foreign investment. Provincial people's governments shall confer the power of economic administration at prefecture city level on national development zones according to the law, formulate and issue corresponding empowerment lists, launch pilot programs of conferring appropriate provincial power of economic administration and approval in national development zones with good conditions, and support national development zones in soundly and efficiently using relevant power and heightening their capability of comprehensive services. National development zones shall be supported in replicating and promoting the experience in the reform of separating permits from business license in Pudong New Area of Shanghai and innovating and exploring the rules and measures for interim and ex-post regulation. Advanced international experience shall be drawn on, and foreign-funded enterprises shall be encouraged to participate in the construction and operation of the in-zone parks and zones consisting of multiple parks, among others. (The Ministry of Natural Resources, the Ministry of Housing and Urban-Rural Development, the Ministry of Commerce, the State Administration of Market Regulation, and other relevant authorities and all provincial people's governments shall be responsible according to the division of labor based on duties)
21. Using the role of development zones in demonstrating, stimulating, and improving the utilization of foreign investment. Provincial people's governments shall make policies in support of the renovation of cities where development zones are situated and the improvement of industrial zones, optimize the supply of land stock, and introduce high-tech and high-value-added foreign-funded enterprises and projects. All regions shall make land use arrangements in favor of the introduction of foreign investment and the promotion of transformation and upgrading in the leading industries in national development zones. A more flexible personnel system among the investment promotion departments and teams, among others, in national development zones shall be put into effect, so as to improve professional and market-oriented service capabilities. The internationalization of the construction of national development zones shall be further improved. (The Ministry of Human Resources and Social Security, the Ministry of Natural Resources, the Ministry of Housing and Urban-Rural Development, the Ministry of Commerce, and all provincial people's governments shall be responsible according to the division of labor based on duties)
22. Intensifying the financial support for investment attraction in development zones. Various green environmental protection funds shall be directed to operate in accordance with market-oriented principles, support foreign investors in participating in the environmental remediation, energy conservation, and emission reduction in national development zones, and provide financial support for national development zones to introduce advanced energy conservation and environmental protection technologies and enterprises. Local governments may support green environmental protection funds in investing in the relevant projects in national development zones by improving the pricing of public services, implementing concession modes, and other means. The establishment of government-backed financing security institutions shall be encouraged, in order to provide security for financing, re-security, and other services, support national development zones in introducing overseas innovation-oriented enterprises and venture capital institutions, among others, and promote innovation-driven development. (The National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Ecology and Environment, the Ministry of Commerce, and other relevant authorities shall be responsible according to the division of labor based on duties)
23. Improving the two-way collaborative investment attraction mechanisms of development zones. Certain industry transfer and collaboration platforms in national development zones in eastern China shall be established to promote the transfer and cooperation of industry projects. Local governments shall be supported in formulating measures in cost apportionment and interest sharing, talent exchange and cooperation, collaboration in industry transfer, and other aspects, and the national development zones in eastern China shall be driven to establish industry transfer parks in western China and the old industrial base in northeast China in various forms. The national development zones in eastern China and central and western China shall be supported in cooperating in introducing international dual-system vocational education institutions, so as to increase the effective supply of human resources to foreign-funded enterprises. (The National Development and Reform Commission, the Ministry of Education, the Ministry of Industry and Information Technology, the Ministry of Human Resources and Social Security, the Ministry of Natural Resources, the Ministry of Housing and Urban-Rural Development, the Ministry of Commerce, and other relevant authorities and all provincial people's governments shall be responsible according to the division of labor based on duties)
All regions and all authorities shall fully understand the significance of promoting the expansion of opening up and the active and effective utilization of foreign investment in the new era for the building of a modern economic system and the stimulation of economic upgrading, attach great importance, take the initiative, focus on implementation, prioritize actual results, and ensure that all measures are efficiently connected with policies already issued and forces are joined. If the revision or repeal of any administrative regulations, document issued by the State Council, or departmental regulations approved by the State Council is required, the original lead drafting authority or the Ministry of Commerce shall, in conjunction with relevant authorities, report to the State Council for revision or repeal. The Ministry of Commerce and the National Development and Reform Commission shall, in conjunction with relevant authorities, tighten supervisory inspection and report major issues to the State Council for instructions in a timely manner.
State Council
June 10, 2018