China is likely to keep retrenching foreign investment in the resource field, said a research report from research institute Anbound Consulting.
Anbound noted the National Development and Reform Commission (NDRC) stated on November 7 the government will no longer encourage foreign investment in the development of several types of ores so as to protect rare or unrenewable mineral resources.
The Catalogue of Industries for Foreign Investment (revised in 2007) jointly issued by NDRC and the Ministry of Commerce on October 31 will take effect as of December 1, 2007. In the new Catalogue, NDRC said China will not encourage foreign investment in rare or unrenewable mineral resources. Foreign investment is no longer allowed to explore and mine some important unrenewable mineral resources, and is restricted or forbidden to access projects of high energy consumption and pollution.
The development of copper, zinc, lead and bauxite is removed from the category of industries where foreign investment used to be encouraged; exploring and mining of tungsten, tin, antimony and molybdenum are listed in the category of forbidden industries, rather than restricting foreign investment, and gold, silver and platinum remain in the restrictive category.
The revision of the Catalogue of Industries for Foreign Investment is part of the central government's macro control in the form of industry policy, said Anbound.
The stipulation on not encouraging foreign investment in China's key mineral resources, as the government's fresh measure on saving energy and cutting resource consumption, displays the government's attempt to strengthen control over mineral resources on one hand, and reflect the change in the use of foreign investment on the other.
It is foreseeable that retrenching in the mineral resource field has just started, said Anbound, adding that the limit on foreign investment in the resource and energy field may expand in the future as China remains short of resources and energy. – Asia Pulse
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