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Instructive Directory on Industries Restricting & Prohibiting Foreign Investment

Directory on Industries Restricting Foreign Investment:


I. Light industry

1. Assembly of machinery and digital watch, both core and end products, bicycles and family-use sewing-machines.
2. Household electric appliances: washing machines, refrigerators, and freezers.
3. Pop-top cans.

II. Textile industry

Annual production of less than 5.000 ton of polyester fiber filament.

III. Coal industry

Indigenous coking.

IV. Ferrous metallurgical industry

1. Ferrosilicon and ordinary carbon electrode.
2. Steel-making with ordinary electric furnaces with a production capacity of less than 30 tons, or steel-making with converter furnaces with a production capacity of less than 30 tons, and sintering and coking with blast furnaces with a production capacity of 300 cubic meters and below and related production.
3. Roller that produces welded pipes of 100 millimeters and blow, and seamless pipes of 76 millimeters and blow, ordinary steel first rolls, and cogging mills.

V. Non-ferrous metal industry

Aluminum materials and aluminum doors and sashes.

VI. Petrochemical and chemical industries.

1. Nitrobarite and naphhtylamine.
2. Oil refineries with capacity of below 2.5 million tons.
3. Production of angle tyres, recondition of old tyres (except meridian tyres), and production of low-performance industrial rubber parts.
4. Iodine extraction from kelps.

VII. Machine-Building Industry

1. Common polyester fibre filament, and short fibre equipment.
2. Manufacturing of ordinary passenger and ferry ships ship-use diesel engines, and diesel power generators.
3. Processing of silicon carbide raw materials.
4. Electric drillers and grinders.
5. Ordinary carbon steel welding rods.
6. Common standard fasteners, and small and medium-size bearings.
7. Ordinary chamber acid storage battery.
8. Containers.
9. Elevators.

VIII. Electronics Industry

1. Radios, and radio-cassette recorders.
2. Black-and-white television sets and black-and-white teletrons.
3. Computer notebooks with less than 16 bits.
4. Cordless telephone facilities of less than 450-megahertz.
5. Radio and television transmitting systems.

IX. Building Material Equipment and Other Non-metals Manufacturing Industries

1. Cement production lines each with an annual production capacity of less than 300,000 tons.
2. Plate glass production lines each with a daily melting volume of less than 200 tons.

X. Pharmaceutical Industry

1. Anti-biotics: Chloromycetin, gentamicin and pantomycin.
2. Chemical compound medicines: analginum, vitamin-B1, and vitamin-B6.
3. Tablets made from Chinese herbal medicines (expect those made with Chinese traditional technology).
4. Finished or semi-finished products of form Chinese herbal medicines.

XI. Medical Apparatus

1. Non-self-destructive but only-used-for-once injectors.
2. Medium and low-grade B-type ultrasonic kinescopes.
3. Electrocardiograph.

XII. Service Industry

1. Taxi ( the cars should only be purchased on the Chinese mainland).
2. Gas stations ( only limited to construction and operation related with projects).


I. Agriculture, Forestry, Animal Husbandry, Fishery and Related Industries

1. Processing and export of precious tree breeds ( sole foreign ownership not allowed).
2. Offshore fishing and fishing in inland waters ( solo foreign ownership not allowed).

II. Light Industry

1. Table salt, industrial salt.
2. Foreign brand and non-spirit drinks (including solidified drinks).
3. Brand-name liquors.
4. Diacetate cellulose and tows.
5. Tobacco processing industry, i.e. cigarette and filter production.
6. Processing and production of pig, cattle and sheep wet skins.
7. Natural perfumes.

III. Textile Industry

1. Woolen textile and cotton textile.
2. Raw silk and blank silk.
3. Artificial fibres and raw materials (including polyester, acrylonitrile and 66-salt nylon).

IV. Coal Industry

Excavation of coal for coking (solo foreign ownership not allowed).

V. Non-ferrous Metals Industry (sole foreign ownership not allowed)

1. Copper processing.
2. Excavation, selection, smelting and processing of precious ores (including gold, silver and platinum).
3. Excavation of wolfram, tin, stibium ores.
4. Excavation and refining of rare earth.

VI. Petro-chemical and Chemical Industries

1. Black-and-white and color films.
2. Excavation and processing of ludwigite.
3. Strontium salt.
4. Benzidine.

VII. Machine-building Industry

1. Finished sedan cars (The State, however, must have dominant shares or be in control).
2. Completed motorcycles (The State, however, must have dominant shares or be in control).
3. Completed light-duty vehicles (including light-duty passenger buses and vans) (The State, however, must have dominant shares or be in control).
4. Automotive and motorcycle engines (The State, however, must have dominant shares or be in control).
5. Automotive air-conditioner compressors, electronic controlled fuel spurt systems.
6. Reconditioning and dismantle of second-hand cars and motorcycles.
7. Air-conditioner and refrigerator compressors with a power of below two kilowatts (excluding air-conditioner compressors for automobiles).
8. Dispersal control systems (including programable controllers).
9. Desk-top static-electric photo-copiers.
10. Thermal-power plant equipment: generating units of more than 100,000 kilowatts each (generators, steam turbines, boilers, auxiliary engines and control equipment); gas turbine combined cycle power generating equipment; cycle fluidization boilers; gasification combined cycle technology and equipment; pressure-increasing fluidization equipment, desulphurization or dedenitration equipment (sole foreign ownership not allowed).
11. Hydraulic power plant equipment: generating units with a rotator diameter of five meters and above(including auxiliary engine and control equipment); large-scale pump storage generating units with a capacity of above 50,000 kilowatts each; large-scale injection-type generating units each with a capacity of 10,000 kilowatts or above (sole foreign ownership not allowed).
12 Nuclear power plant equipment: with a capacity of 600,000 kilowatts and above generators (sole foreign ownership not allowed).
13. Electricity transmission and transformation equipment: manufacturing of large-scale transformers of 220 kilovolts and above, high-voltage switches, mutual sensors and cable-making equipment (sole foreign ownership not allowed).

VIII. Electronics Industry

1. Color television sets and tuners, remote control, and cycle transformers.
2. Color video display tubes and plate exterior.
3. VCRs and video tape recorders.
4. Tape recorder magnetic heads, magnetic drums and bolts.
5. Simulation mobile telecommunication systems (cellular, pager, etc.).
6. Fax machines.
7. Satellite dishes for television-program receiving and key parts.
8. Below 4-thyrsus micro-wave relay telecommunications systems.

IX. Building material equipment and other non-metals manufacturing industries

Mining, extraction and processing of diamond and other natural precious non-metal gem minerals (sole foreign ownership not allowed).

X. Pharmaceutical Industry

1. Chinese herbal medicines subject to government*s export permit management.
2. Pre-form of narcotics including ephedrine, pheudoephedrin, ergobasine and ergotamine.
3. Malaria-resistant medicines including benzylpenicillin and others.
4. Addictive anesthesia and mental drugs.
5. Vitamin-C.
6. Blood products.

XI. Communication, Posts and Telecommunication Industry

1. Construction and operation of railway arteries. (The State, however, must hold dominant shares or be in control).
2. Transportation on water ( sole foreign ownership not allowed).
3. Cross-border automotive transportation (sole foreign ownership not allowed).
4. Air transport (The State, however, must hold dominant shares or be in control).
5. General-use aviation (in case of industrial aviation, the State must hold dominant shares or be in control; and in case of agriculture-or forestry-use aviation, (sole foreign ownership is not allowed).
6. Manufacturing of digit-programing and user exchange telephone equipment.

XII. Domestic and foreign trade, tourism, real estate and service industries (sole foreign ownership not allowed)

1. Retail and wholesales.
2. Materials and equipment supply and sales.
3. Foreign trade.
4. Construction and operation of State tourism zones.
5. High-grade hotels, villas and office buildings.
6. Golf courses.
7. Travel agencies.
8. Accounting, auditing, legal advisory and consultancy, and brokerage companies.
9. Agent services (shipping, ferry transport, futures, sales and advertising).
10. Education and translation services.

XIII. Finance and Relevant industries

1. Banking, financial companies, investment and trust companies.
2. Insurance companies, insurance brokerage and agent companies.
3. Securities, investment banks, commercial banks and fund management companies.
4. Financial leasing.
5. Foreign currency exchanges.
6. Finance, insurance and foreign currency consulting.
7. Production, processing, wholesale and retail sales of gold, silver, gems and jewelry.

IVX. Others

1. Printing industry, publication and circulation industry (solely foreign ownership not allowed).
2. Inspection and appraisal of import and export commodities (sole foreign ownership not allowed).
3. Manufacturing, publication and circulation of audio and video products.

XV. Other industries restricted by international conventions and agreements that China has signed or joined

Directory on Industries Prohibiting Foreign Investment:

I. Agriculture, Forestry, Animal Husbandry, Fishery and Related Industries

1. Wild animal and plant resources that are protected by the State.
2. Rare and fine species in China (including fine genes in planting, animal husbandry and aquatics).
3. Construction of natural reserves for animals and plants.
4. Processing of green tea and special tea (such as brand-name tea and black tea).

II. Light Industry

1. Ivory carving, tiger-bone processing.
2. Hand-made carpet.
3. Lacquerware.
4. Hawksbill shell products.
5. White-and -blue procelain.
6. Rice paper, ink sticks.

III. Power Industry and Urban Public Utilities

1. Construction and operation of power grids.
2. Construction and operation of urban water supply and discharge, cooking gas and heating networks.

VI. Excavation and Processing of Mines

Mining, extraction, smelting and processing of radioactive minerals.

V. Petrochemical and Chemical Industries

1. Mining and processing of boromagnestite.
2. Mining of zolestin.

VI. Pharmaceutical Industry

1. Chinese herbal medicines that are on the State protection list (including must, licorice, eucommia ulmoides and others).
2. Chinese traditional herbal medicine making technology and products that are made with secret recipes.

VII Post and Telecommunications, and Communications Industries

1. Operation and management of posts and telecom businesses.
2. Air traffic control.

VIII. Trade

Futures trading.

IX. Radio, Film and Television

1. All level of radio stations and television stations (including cable television networks and transmit stations, and relay stations).
2. Production, publication and circulation of radio and television programs.
3. Film production, circulation and public show.
4. Video show.

X. Mass Media

XI. Military weapons production

XII. Others

1. Projects that pose danger to military facilities and their utilization performance.
2. Raw materials and processing of cancer, deformity and mutation causing materials.
3. Horse-racing courses and gambling.
4. Sex services.

XIII. Other industries prohibited by international conventions and agreements that China has signed or joined.

Note: The English translations are for reference only.

See also…

Doing Business in China (Law Forum)