China will relax the investment threshold in existing pilot free trade zones for foreign companies in areas such as international shipping, aircraft design and repair, entertainment, urban rail projects and renminbi businesses, according to a State Council notice released on Jan 9.
The notice, signed by Premier Li Keqiang, altered 11 administrative regulations, two State Council documents and another two governed by its departments. The document is effective in China’s 11 pilot free-trade zones, such as the ones in Shanghai and Tianjin.
The requirement for foreign banks to apply for renminbi businesses after one year of operation was also suspended, the notice said.
The requirement of 70 percent domestic equipment was lifted for foreign-invested urban rail projects, meaning investors can buy equipment made in China or from abroad at their choice.
Foreign investors will be allowed to establish sole proprietorships to design, manufacture and repair civil aviation aircraft of 6 metric tons, or less than nine seats. The investment ratio will be canceled for the design and manufacturing of helicopters of 3 tons and above.
Foreign businesses will also be allowed to set up sole-ownership ventures to operate international shipping, goods unloading and container stations. They also can hold 51 percent of shares in international ship broker businesses in forms of joint ventures and cooperation.
Foreign investors will be allowed to establish entertainment venues and provide services in free-trade zones, while foreign investors and those from Taiwan can set up performance agencies to provide services in the provinces and municipalities in which free-trade zones have been built.
The notice was the central government’s latest move to create an equal environment for foreign investors, as the State Council has reiterated its stance to further open up to foreign investment.
In March, the State Council approved guidelines for seven pilot free-trade zones in Chongqing, and Liaoning, Zhejiang, Henan, Hubei, Sichuan and Shaanxi provinces. Three months later, the General Office of the State Council released management measures on foreign investors in free-trade zones and further opened up sectors such as transport, information technology services and finance.