China Regulatory Brief: 2015 Guidance Catalogue for Foreign Investment Industries Released

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Updated Guidance Catalogue for Foreign Investment Industries (2015) Released

On March 10, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) jointly released the “ Catalogue for the Guidance of Foreign Investment Industries (2015),” which will take effect on April 10. The Catalogue lifts restrictions on foreign investments in various industries, including logistics, e-commerce and finance. The Catalogue also encourages foreign investment into modern agriculture, high technology and environmental protection. Specifically, the limit of shares of a foreign entity may own in a telecommunications company providing value-added telecommunication services has been raised to 50 percent (exclude e-commerce services). Foreign investors may own 49 percent of shares in securities investment funds management companies.

The Catalogue follows a draft version released in November 2014.

Cross-Border E-commerce Pilot Zone to be Established in Hangzhou

On March 12, China’s State Council officially announced its plan to establish a cross-border e-commerce pilot zone in Hangzhou, the capital of Zhejiang province in Eastern China. The zone is the first of its kind in China with a focus on cross-border e-commerce transactions, payment, logistics, customs clearance and exchange settlement. Hangzhou is China’s cradle of e-commerce giant Alibaba, and home to many internet companies. Alibaba has shown its willingness to cooperate with the Hangzhou e-commerce pilot zone via its Tmall Global platform right after the official announcement was made.

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Compared with the previously approved seven cross-border e-commerce pilot cities such as Ningbo and Shanghai, the new zone in Hangzhou will mainly offer tax incentives. In 2014, the online sales volume in Zhejiang province alone reached RMB 564.2 billion. More details about the plan will be published by the Zhejiang provincial government soon.

China Adjusts Unemployment Insurance Rate

The Ministry of Human Resources & Social Security and the Ministry of Finance jointly released the “Circular on Adjusting the Unemployment Insurance Rate (Ren She Bu Fa[2015] No.24),” which took effect on March 1, 2015. According to the Circular, the unemployment insurance rate would be reduced from three percent to two percent. The proportion paid by employees and employers will be determined by the local government.

Related Link IconRELATED: Understanding China’s Social Security System

China’s social insurance system is comprised of pension, medical insurance, unemployment insurance, maternity insurance and work-related injury insurance. Employers in all major cities are required by law to make a contribution towards unemployment insurance and most cities employees need to make a contribution as well. 

AIC Strengthens Protection for Consumer Rights

On the occasion of World Consumer Rights Day, the State Administration of Industry and Commerce (AIC) issued an Opinion to enhance protection for consumer rights. The Opinion stipulates that online shoppers can demand compensation from the online platform if the platform cannot provide the real names and addresses of vendors where any infringement on consumers’ rights occurs. The AIC is also making an effort to establish a sound compensation system, which requires shopping malls, markets and online platforms to sign a compensation rules agreement with sellers or service providers in advance. In this case, malls and platforms may make compensation to consumers first and then get paid back by the relevant sellers.


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