Chinese investment guide to encourage more foreign funds

The Chinese government on Tuesday began to solicit public opinion on a catalogue of industries to guide foreign investment.

The draft axes the number of sectors that limit foreign investment from 79 to 35 and cuts the number of items that demand Chinese investors hold a larger share from 44 to 32.

In this round, the catalogue will see the most revisions in its history in terms of cutting restrictions on foreign investment, said Wang Dong, an official with the National Development and Reform Commission.

China started issuing the catalogue in 1995 and has been revising it every three years. The current version was issued in 2011.

The draft no longer limits foreign investments in sectors such as steel, ethylene, oil refining, paper making and premium spirits. Some of the sectors have faced production overcapacity.

For such sectors, more foreign investment can help boost industrial upgrading, said Long Guoqiang, a researcher with the Development Research Center of the State Council.

For example, China's steel output ranks the first in the world, but the country has to import a lot of high-end steel products, Long said, adding that allowing more foreign investment into the steel sector will help bring more technology as well.

The draft also lists 349 sectors that welcome foreign investment, including vocational training, homes for seniors and services for children and the disabled.