The NDRC Said It Would Substantially Relax Restrictions On Chinese Enterprises' Overseas Investment.

In March 19th, on the sidelines of the 2011 China National Forum on pnational corporations held in March 1st, Kong Linglong, director of the State Development and Reform Commission, using the foreign investment and overseas investment division, told reporters that the NDRC had begun brewing the law of overseas investment promotion of Chinese enterprises with the Ministry of Commerce, and is currently in the drafting stage.

In a speech at the forum, Kong Linglong said that the NDRC will substantially relax restrictions on overseas investment by Chinese enterprises.

Kong Linglong said that at present, China has "foreign investment enterprise law" in the aspect of "import and export", but there is not a relatively complete law at the national level for overseas investment of Chinese enterprises.

It is the expectation of the industry for many years to establish laws at the national level to regulate and encourage Chinese enterprises to invest abroad.

It is learnt that although the relevant departments of our government have issued a series of regulations, such as the "overseas investment management measures" promulgated by the Ministry of Commerce and the regulations on foreign exchange management of foreign direct investment issued by the State Administration of foreign exchange, etc., it has played a great role in creating a favorable environment for investment and facilitation for enterprises. However, there is still a certain gap between the development trend and urgent requirements of our enterprises' "going out", mainly because the level of effectiveness is not high, and the existing departmental rules and regulations are heavier in supervision, but not enough in terms of protection and promotion.

According to the insiders, a very likely path is to formulate regulations at the national level to promote the overseas investment of Chinese enterprises, and then pition to the legislative level.

The National Federation of industry and commerce this year "two sessions" will submit "on the formulation of relevant regulations and improve the protection agreement to promote Chinese enterprises" going out "proposal, recommended that the State Council's" Regulations on overseas investment promotion "should be formulated as soon as possible, and the existing departmental rules and regulations should be cleaned up and integrated.

The definition, approval procedures, personnel entry and exit, financing, labor source, profit distribution, profit reinvestment, and tax policy of overseas investment are clearly stipulated.

After several years of practice, the legislative procedure of the overseas investment promotion act is launched again.

Prior to this, Li Mingguang, director of the Ministry of foreign investment and economic cooperation of the Ministry of Commerce, told the media that the long awaited regulations on overseas investment have already formed a draft of recommendation.

According to Li Mingguang, the regulations and supporting management measures include large scale decentralization of examination and approval authority for overseas investment, and creating favorable legal environment and conditions for overseas investment of Chinese enterprises.

During the "12th Five-Year" period, the Chinese government will continue to encourage Chinese enterprises to "go out".

Kong Linglong said in a forum on the 1 th, the NDRC will substantially relax restrictions on overseas investment of Chinese enterprises. From this month, the starting point for the approval of resources overseas investment projects will be raised from US $30 million to US $300 million, and the starting point for the approval of non resources overseas investment projects will be raised from US $10 million to US $100 million.

Kong Linglong said that in addition to substantially relaxing the examination and approval restrictions and providing investment convenience for enterprises, it also considered setting up a platform for solving problems for enterprises, such as establishing communication mechanisms among customs, commodity inspection, trade and other departments, as well as the communication mechanism of these departments corresponding to foreign related departments.

In addition, during the "12th Five-Year" period, various policies should be created to solve problems such as imbalance in intermediary development, and the development of enterprises' associations and self-discipline organizations.

Chen Deming, Minister of Commerce, also said that during the "12th Five-Year" period, the Ministry of Commerce would pay more attention to "going out" and make overall plans to promote investment cooperation in the fields of energy resources, infrastructure, processing and manufacturing, agriculture and other fields.

Cultivate a number of internationally competitive multinational companies, making them the backbone and important support for China's participation in economic globalization.

According to the Ministry of commerce data, from 2002 to 2010, China's foreign direct investment increased by an average annual rate of 52%.

During the "11th Five-Year" period, the overseas investment of Chinese enterprises increased by 35%, and the growth rate was four times that of the "fifteen" period.

In 2010, China's domestic investors made direct investment in 3125 overseas enterprises in 129 countries and regions, and realized non financial foreign direct investment of US $59 billion, an increase of 36.3% over the same period last year.

By the end of 2010, China had accumulated $258 billion 800 million in foreign direct investment in non-financial sector.