China eases approval process for foreign investment, effective June

BEIJING – China’s National Development and Reform Commission (NDRC) will relax the approval process for foreign companies planning to invest in China from June 17, adopting a system of ‘limited approval’ and ‘general registration’ instead of the existing ‘all-round approval’ mechanism.

According to the new regulation, all investment projects exempt from approval can go through the registration process with local authorities, and some of the projects needing NDRC approval can directly apply for approval from local authorities. The NDRC is also simplifying procedures for approval and registration by ending review of market prospects, potential economic effects and product technology plans for a proposed project.

Foreign direct investment (FDI) into China has been slowing in the past few years, falling 3.7% to US$111.7 billion in 2012, down from US$116 billion in 2011, prompting the Government to smooth the approval process.