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One of the key tools used by the Chinese government to direct foreign investment into China, the Encouraged Industry Catalogue is significant in international trade with China. It classifies various industries into the four groups which are Encouraged, Permitted, Restricted and Prohibited which has subsequent effects on foreign firms wishing to operate in such sectors. As one of the key tools used by the Chinese government to direct foreign investment into China, the Encouraged Industry Catalogue is significant in international trade with China. It classifies various industries into the four groups which are Encouraged, Permitted, Restricted and Prohibited which has subsequent effects on foreign firms wishing to operate in such sectors.


Encouraged industries generally recieve favourable tax treatment whilst those in the Permitted category are treated on a quite neutral basis. If an industry is restricted, foreign investment is usually limited to a minority shareholding in a joint venture whilst Prohibited industries cannot have any form of foreign investment at all. Encouraged industries generally recieve favourable tax treatment whilst those in the Permitted category are treated on a quite neutral basis. If an industry is restricted, foreign investment is usually limited to a minority shareholding in a joint venture whilst Prohibited industries cannot have any form of foreign investment at all.

Revision as of 09:04, 3 July 2005

As one of the key tools used by the Chinese government to direct foreign investment into China, the Encouraged Industry Catalogue is significant in international trade with China. It classifies various industries into the four groups which are Encouraged, Permitted, Restricted and Prohibited which has subsequent effects on foreign firms wishing to operate in such sectors.

Encouraged industries generally recieve favourable tax treatment whilst those in the Permitted category are treated on a quite neutral basis. If an industry is restricted, foreign investment is usually limited to a minority shareholding in a joint venture whilst Prohibited industries cannot have any form of foreign investment at all.