3. Catalogue for the Guidance of Foreign Investment Industries

Foreign investment projects fall into four categories: the encouraged, the permitted, the restricted and the prohibited. Projects listed in the “Catalogue for the Guidance of Foreign Investment Industries” are either encouraged, restricted, or prohibited categories. Projects not falling into the categories of aforesaid three types are permitted projects, which are not listed in the “Catalogue”.

Any project of the following cases is classified as “encouraged foreign investment project”:
1) Projects of new agricultural technology and comprehensive agricultural development and of energy sources, transportation and communication, and key raw material industries;
2) Projects of new and high technology, of advanced applicable technology, and of being able to improve product performance, boost the technological and economic efficiency of enterprise, or produce new facilities and materials that can fill the gap of domestic production deficits;
3) Projects capable of meeting market demand, upgrading products, exploring new markets, or of enhancing the international competition competence of products;
4) Projects of new technology, with up-to-date facilities, capable of saving energy sources and raw materials, utilizing comprehensively resources and recycled resources as well as preventing environmental pollution;
5) Projects in conformity with national policies for industries and capable of exploiting the advantages of human and natural resources in the Midwest of China.
6) Projects as otherwise stipulated in laws and regulations.

Any project of the following cases is classified as “restricted foreign investment project”:
1) Projects of out-of-date technology;
2) Projects not contributing to resource conservation and ecological and environmental amelioration;
3) Projects engaging in the exploration and exploitation of mines that are stipulated by the state as “mines of protective exploitation”;
4) Projects of industries that are stipulated by state as “gradually accessible to foreign investment”;
5) Projects as otherwise stipulated in laws and regulations.

Any project of the following cases is classified as “prohibited foreign investment project”:
1) Projects detrimental to national security or public interests;
2) Projects polluting and harming environment, damaging natural resources or public health;
3) Projects occupying farming land of large quantity, not contributing to the conservation and development of land resource;
4) Projects jeopardizing military facilities and their efficiencies;
5) Projects employing techniques or technologies unique in China;
6) Projects as otherwise stipulated in laws and regulations.