China strikes telecoms from list of “sensitive” outbound sectors
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The Chinese government has reportedly taken the telecoms sector off a list of “sensitive sectors” that require special approvals for outbound investment.
The list compiled by the National Development and Reform Commission (NDRC) names the industries that Chinese planning to invest in an overseas company or project need to secure approval for.
Starting from next month, companies investing in overseas telecoms projects will instead only need to file the same records with authorities as required for investment in other non-sensitive sectors.
The telecoms sector has been considered sensitive since the previous list was published in 2014.
The change comes at a time that the Philippines government is courting Chinese investment in its mobile market through a proposed 60-40 venture that would become the nation’s third telco.
Xinhua noted that China’s outbound direct investment outside of the financial sector fell 29.4% in 2017 to $120 billion.
As part of the reforms to the sensitive sector list, the energy sector has also been removed while the arms industry, properties, hotels, cinemas, entertainment, sports clubs, and equity investment funds have been added.
Questions & Answers
Q.What does being on the “sensitive sectors” list mean for Chinese companies wanting to invest overseas?
What does being on the “sensitive sectors” list mean for Chinese companies wanting to invest overseas?
Companies planning to invest in an overseas company or project within a sensitive sector needed to secure special approval from the National Development and Reform Commission. This process is now simplified for telecoms investments.
Q.What is the new process for Chinese companies investing in overseas telecoms projects?
What is the new process for Chinese companies investing in overseas telecoms projects?
Starting next month, companies investing in overseas telecoms projects will only need to file the same records with authorities as required for investment in other non-sensitive sectors. This simplifies the approval process significantly.
Q.Which sectors have been added to the sensitive list as part of these reforms?
Which sectors have been added to the sensitive list as part of these reforms?
The arms industry, properties, hotels, cinemas, entertainment, sports clubs, and equity investment funds have been added to the list of sensitive sectors requiring special scrutiny for outbound investment.
Q.Has any other sector been removed from the sensitive list besides telecoms?
Has any other sector been removed from the sensitive list besides telecoms?
Yes, as part of the reforms to the sensitive sector list, the energy sector has also been removed. This means it too will now have a simpler approval process for outbound investments.
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