China relaxes FDI rules to counter slowdown

China on Sunday liberalised rules of entry for foreign firms and announced new measures for them to access its domestic vast market, making a fresh pitch for FDI to reinvigorate the world’s second largest economy amid continued slowdown.

Except for certain sensitive industries, foreign direct investment will now only require registration, rather than administrative approval, an official statement after central cabinet meeting chaired by Premier Li Keqiang said.

Details on the working of the new system will be released online by the Ministry of Commerce (MOC), state-run Xinhua news agency reported.

Foreign companies will submit applications online and receive a response within three days.

That is to say, as long as their business is not on a “negative list”, foreign investors will only need to deliver business plans to local regulators, the report said.

The government estimates that this means over 95 per cent less procedures. The practice has been tested in various pilot free trade zones.

“A negative list for foreign investment, initiated by Shanghai pilot free trade zone in October 2013, will now be rolled out nationwide, which marks an end of an era dominated by administrative approvals,” Ye Lin, professor of Renmin University of China Law School was quoted as saying by the report. “The move goes in line with foreign investors' anticipation of a wider opening Chinese market so as to further share the bonus of the country's growth,” said Gmw.cn analyst Xie Weifeng.