Industry Trend Analysis - Relaxed Foreign Ownership Restrictions Will Not Increase Mining FDI - OCT 2017


BMI View: China ' s relaxed restrictions on foreign ownership in certain areas of the mining sector will result in better, but not absolute , safeguarding of foreign investors' interests with regard to ownership rights. These reforms will not lead to a strong influx of investors in the mining landscape, due to high barriers to entry in a sector dominated by state-owned enterprises.

In June 2017, the National Development and Reform Commission (NDRC) and the Ministry of Commerce jointly issued a new revised Catalogue of Industries for Guiding Foreign Investment (CIGFI) that came into effect on July 28 2017. The issuance of the new CIGFI follows on an executive meeting of the State Council in December 2016, chaired by Premier Li Keqiang, which approved new guidelines to further attract foreign investment. The amendments in the new CIGFI relaxed restrictions on foreign investment and operations in the Chinese service, manufacturing and mining sectors. Foreign investors will now be able to explore and mine precious metals including gold, silver and platinum, mine and develop lithium ore, and smelt molybdenum, tin, antimony and other rare metals.

We believe the new relaxed restrictions on foreign ownership in these sectors will result in better, though not absolute, safeguarding of foreign investors' interests when it comes to ownership rights, however will fail to lead to a strong influx of investors in the mining landscape.

China's FDI Growth Losing Steam
China - Foreign Direct Investment Net Inflows Volume And Growth
Source: World Bank, BMI

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