WORLD TRADE  
ORGANIZATION   
G/TRIMS/W/90 
27 September 2011 
 (11-4678) 
Committee on Trade-Related Investment Measures Original:   English 
  
 
COMMUNICATION FROM CHINA 
 
  The following communication, dated 23 September 2011, is being circulated at the request of the Delegation of China.   
 
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TRANSITIONAL REVIEW MECHANISM PURSUANT TO PARAGRAPH 18 
OF THE PROTOCOL ON THE ACCESSION OF THE PEOPLE'S 
REPUBLIC OF CHINA ("CHINA")
1  
 
Information notified by China on Annex 1A of the Protocol 
on the Accession of the People's Republic of China 
 
 
II. ECONOMIC POLICIES  
3. Investment Regime  
(a) completed revisions to investment guidelines in conformity with the WTO Agreement 
The basic legal framework for the administration of  foreign direct investment in China includes 
Law of the People's Republic of China on Chinese-Foreign Equity Joint Venture , Law of the People's 
Republic of China on Chinese-Foreign Contractual Joint Venture , Law of the People's Republic of China 
on Foreign Capital Enterprises  as well as their implementing regulati ons and rules.  Under this framework 
and pursuant to the Provisions on Guiding Di rection of Foreign Investment (State Council Decree No. 346 
issued in 2002), National Development and Reform  Commission (NDRC) and Ministry of Commerce 
(MOFCOM) jointly promulgate the Catalogue for the Guidance of Foreign Investment Industries and the 
Catalogue of Advantaged Industries for Foreign Investment in Mid-West China  to serve as the basis and 
criteria for the access of foreign invest ment into specific industries.   
 
 All these laws, regulations and rules related to foreign investme nt have been reviewed and/or 
revised at the time of China's accession to the WT O for the purpose of eliminating trade and foreign 
exchange balancing requirements, lo cal content and export performance requirements and therefore are in 
conformity with the WTO rules.   The Catalogue for the Guidance of  Foreign Investment Industries currently in force  is the 
Catalogue for the Guidance of Foreign Investment Industries (2007) .  It was promulgated jointly by NDRC 
and MOFCOM on 31 October 2007 (NDRC and MOFCOM Decree No. 57 issued in 2007) and came into 
force on 1 December 2007.  The previous Catalogue for the Guidance of Foreign Investment Industries 
                                                      
1 WT/L/432. G/TRIMS/W/90 
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  (2004) promulgated in November 2004  (NDRC and MOFCOM Decree No. 24 issued in 2004) was 
annulled at the same time.   The  Catalogue of Advantaged Industries fo r Foreign Investment in Mid-West China currently in 
force is Catalogue of Advantaged Industries for Foreign Investment in Mid-West China (2008) .  It was 
promulgated on 23 December 2008 by NDRC and MOFC OM (NDRC and MOFCOM Decree No. 4 issued 
in 2008) and entered into force as from 1 January 2009.  The previous  Catalogue of Advantaged Industries 
for Foreign Investment in Mid-West China (2004)  promulgated in July 2004 by NDRC and MOFCOM 
(NDRC and MOFOM Decree No. 13 issued in 2004) and the  Catalogue of Advantaged Industries for 
Foreign Investment in Liaoning Province  (NDRC and MOFCOM Decree No. 47 issued in 2006) 
promulgated in September 2006 we re annulled at the same time. 
  Revision of both the Catalogues in the past years has always witnessed further opening up of more 
industries and sectors in China to foreign investment.   In 2010, NDRC and MOFCOM launched a further 
revision of the  Catalogue for the Guidance of Foreign Investment Industries , with the focus being put on 
optimization and upgrading of traditional industries as well as their energy conservation and emission 
reduction, fostering the growth of strategic emer ging industries and accelerating the development of 
services sectors by way of further expansion of the opening-up.  The revision will continue to increase 
items in the "encouraged category" and reduce those in the "restricted category".  The draft of the revised 
Catalogue  was published for solicitation of public opinions on 1 April 2011 at the China Legislative 
Information Network System, or the official website of  the Legislative Affairs Office of the State Council 
at http://www.chinalaw.gov.cn.  
 
IV. POLICIES AFFECTING TRADE IN GOODS  
8. Trade-Related Investment Measures 
(a) elimination and cessation of enforcement of trade and foreign exchange balancing 
requirements, local content and export performance  offsets and technology transfer requirements 
made effective through la ws, regulations or other  
  Please refer to the above information. There have  been no other changes since the last review. 
 (b) amendments to ensure lifting of all measures applicable to motor vehicle producers restricting 
the categories, types or models of vehicles perm itted for production (to be completely removed two 
years after accession)       The current policy of the Chinese government fo r the development of the automobile industry 
is embodied in the Policy for the Development of the Automobile Industry promulgated by the NDRC 
on 21 May 2004 (NDRC Decree No. 8 issued in 2004, later revised in 2009).  On that same day, 
Circular of the State Council on Publishing the Industrial Policy for the Automobile Industry (State 
Council Circular No. 17 of 1994) ceased its implem entation.  With this revision of the policy 
concerning the automobile industry China fulfille d the commitment in the Accession Protocol.  
 
 Later on, to implement the ruling of the WTO Dispute Settlement Body on China – Measures 
Affecting Imports of Automobile Parts , the Ministry of Industry and Information Technology (MIIT) 
and NDRC issued Decree No. 10 on 15 August 2009, revising the Policy for the Development of the 
Automobile Industry as follows: 1. Implementation of Article s 52, 53, 55, 56 and 57 shall cease 
immediately;  2. The provision in Article 60 that  "the administration measures of imported cars and 
auto parts shall be formulated by the General Administration of Customs together with related 
government authorities and shall be implemented after the approval by the State Council" shall cease 
to be implemented.  The above revision took e ffect on 1 September 2009.  On 28 August 2009, the 
General Administration of Customs (GCA), NDRC, Ministry of Finance (MOF) and MOFCOM  G/TRIMS/W/90 
 Page 3 
 
 
  promulgated Decree No. 185, in which it was decided that the Administrative Measures on 
Importation of Automobile Parts Characterized as Complete Vehicles  (GCA, NDRC, MOF, 
MOFCOM Decree No. 125 issued in 2005) was annulled from 1 September 2009.  On 31 August 2009, GCA issued Announcement No. 58 of 2009, declaring that the Rules on Verification 
of Imported Automobile Parts Char acterized as Complete Vehicles was annulled from 
1 September 2009.   
  In addition to that, in order to further fac ilitate foreign investment, MOFCOM has adopted a 
series of measures since 2009 to further simplify the approval procedures a nd to delegate more 
authorities to local administrations for examination and approval of foreign investment projects.  
Among that, projects of capital increase by existing foreign-invested automobile or auto engine 
producing enterprises to enlarge production capacity  of the same type of products (including 
establishment of production capacity of the same type of products in a different location which is not 
a separate legal person), and projects of capital in crease by existing foreign-invested auto parts 
producers to enlarge production capacity can be exam ined and approved by local administrations at 
the provincial level so long as they are within the local authority. 
  In the on-going revision of the Catalogue for the Guidance of Foreign Investment Industries , 
the draft of the revised Catalogue  published for solicitation of public opinions on 1 April 2011 at the 
China Legislative Information Network System, or the official website of the Legislative Affairs 
Office of the State Council has already added such items as auto parts for new energy vehicles into 
the "encouraged category".  
 (c) increased limits within which investments in  motor vehicle manufacturing could be approved 
at the provincial government at the levels outlined in the Report    
 Please refer to the information in paragraph (b ).  There have been no other changes since the 
last review.  
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