China Regulatory Brief: Draft Foreign Investment Law, Tourist VAT Rebates
On January 19, the Chinese Ministry of Commerce (MOFCOM) released the draft of the proposed new Foreign Investment Law to solicit public comments by February 17, 2015. According to the draft, the State Council will publish a negative list of industries in which foreign investment is restricted or prohibited. It is stipulated that most foreign investment, including setting up a new company, will no longer need pre-approval from the State Council unless a foreign party intends to invest in one of the restricted industries on the negative list. In addition, the proposed new law will repeal the Sino-foreign Equity Joint Venture Law, the Wholly Foreign-owned Enterprise Law and the Sino-foreign Contractual Joint Venture Law.
China Expands Tourist VAT Rebate Scheme Nationwide
On January 6, the Ministry of Finance (MOF) released the “Announcement on Implementing Tourist VAT Rebate on Departure Policy to Foreign Tourists (MOF Announcement  No.3),” which took immediate effect. According to the Announcement, foreign tourists (defined foreigners who stay in China for less than 183 days) purchasing goods in certain areas are able to apply for value-added tax (VAT) refunds at the rate of 11 percent. The threshold for VAT refunds is set at RMB 500. In 2011, China launched this policy as a pilot scheme in Hainan. The country is currently looking to expand the tax rebates policy nationwide to boost its domestic tourism industry.
China Plans to Build Beijing-Moscow High-speed Railway
The Chinese government recently announced its plan to build the country’s first high-speed rail link between Beijing and Moscow. The proposed cross-border high-speed rail will run for more than 7,000 kilometers from China through Kazakhstan and arrive in Russia. The railway cuts transport time between the two cities to two days. Currently, it takes six days to travel from Beijing to Moscow by train. China may invest approximately RMB 1.5 trillion (US$242 billion) into the construction of the new line. The new line was proposed in October, 2014 during Chinese Premier Li Keqiang’s visit to Russia.
UK Signs MoU with Yihaodian
On January 15, the UK Department of Trade & Investment (UKTI) and China Britain Business Council (CBBC) jointly signed a memorandum of understanding (MoU) with Yihaodian after a visit to its headquarters in Pudong. Yihaodian is a Chinese online grocery business, partially owned by the retail giant Walmart. Yihaodian owns China’s biggest B2C online platform selling imported food and started cross-border e-commerce business since 2013. The MoU was signed to conclude negotiations over exporting more high-quality agricultural products, especially frozen meat and dairy products, from the UK to China. The CBBC has brought over 800 imported products of over 70 brands into China and is now looking forward to the cooperation with Yihaodian, said Stephen Philips, the chief executive of the CBBC.
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