Aug. 18 – China’s National Development and Reform Commission (NDRC) released a circular on July 23 announcing 10 major measures to encourage private enterprises to invest in and develop key strategic emerging industries. The industries include: energy saving, new generation information technology, biotechnology, high-end equipment manufacturing, new energy, new materials, and new energy vehicles.
The document, titled “Opinions on the Implementation of Encouraging and Guiding Private Enterprises to Develop Strategic Emerging Industries,” commanded relevant government departments and local authorities to take the following measures:
- The existing legal requirements for private enterprise/capital investment access shall be further regulated and simplified. Related authorities shall not set up private enterprise-targeted thresholds in registered capital, investment amount, investment intensity, production capacity scale, land supply, procurement and tender issues, as long as the private enterprises meet the official requirement for energy conservation, as well as environmental protection, and hold related qualifications by law.
- Public resources such as various support funds for strategic emerging industries shall be equally available to private enterprises engaging in strategic emerging industries and development.
- Private enterprises’ participation in relevant policy-making for strategic emerging industries shall be ensured. Relevant organizations, when making policy and development plans, shall establish reasonable working mechanisms and take effective measures to guarantee that representatives of private enterprises and related associations participate in policy-making procedures, and ensure government departments absorb opinions and suggestions from private businesses.
- Authorities shall support private enterprises to enhance their innovation capability. Government departments shall take effective measures to promote public technological innovation platforms that serve private enterprises, develop the system that ensures the talent mobility from higher learning and research institutions to private enterprises, encourage private enterprises to establish corporate technology centers and R&D centers, support qualified private enterprises to apply for the qualification of national-level or provincial-level corporate technology centers, and allow them to participate in projects of the National Engineering Research Center and the National Engineering Laboratory.
- The government shall support the industrialization and marketability of scientific and technological achievements. It shall encourage private enterprises and private capital to participate in related national research and industrialization programs, as well as development of major technologies and important new products.
- Authorities shall encourage the development of new industrial patterns. They shall support private enterprise and private capital to build up innovative business models, such as developing high-tech services.
- The government shall guide private capital to establish venture capital funds and industry/equity investment funds.
- The government shall support private enterprises to take full advantage of new financial instruments, such as bonds, public financing and mortgage.
- The government shall encourage private enterprises to participate in international competition and cooperation. Private enterprises’ overseas business activities – such as investments, mergers and acquisitions, joint R&D, and patent application – shall all be buttressed by related authorities.
- Central government departments and local development and reform commissions shall strengthen mutual coordination and keep information on industries, investments and markets transparent and updated, to avoid abuse of resources. Organizations like the Federation of Industry and Commerce shall work on providing effective information and services to ensure private enterprises’ better participation in the development of strategic emerging industries.
Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China, Hong Kong, Vietnam and India. For more information and advice on how to take advantage of these new measures, please email email@example.com, visit www.dezshira.com, or download the firm’s brochure here.