State Council 11 18th of the month The newly released government-approved investment catalog, announced today, once again significantly reduces the number of projects subject to central-level approval compared to last year, and is widely regarded as “the most substantial delegation of power yet.” As a result, enterprises will enjoy greater autonomy in investment decisions, which will help unleash the creative vitality of market entities. At the same time, the government will continue to strike a balance between deregulation and regulation, strengthening subsequent oversight and supervision.

     The catalog of government-approved investment projects has been “updated” once again. The National Development and Reform Commission announced this on the 11th. 18th of the month A press conference was held today to address public concerns about the revisions to the “Catalog of Investment Projects Subject to Government Approval (2014 Edition)” recently issued by the State Council. The official promulgation of the new edition of the Catalog is widely regarded as “the most significant delegation of power yet,” and has elicited a strong response from the market. Several industry insiders interviewed by the Economic Daily said that this move will further enhance investment facilitation, unlock greater social investment potential, and better enable investment to play its crucial role in adjusting the economic structure and stabilizing growth.

     The scope of filing and management will continue to expand.

     It is reported that the new edition of the “Catalogue” has canceled or delegated approval authority for a total of 38 items. Item. According to calculations, after two revisions last year and this year, the total number of projects approved at the central level has decreased by approximately 76%. The number of approved projects, revised again this year, has been further reduced by 40% compared to last year.

     “For projects characterized by sufficient market competition, where enterprises are capable of self-regulation and can be effectively managed through economic and legal means, the approval requirement will be replaced by a filing system,” said Luo Guosan, Deputy Director of the Investment Department of the National Development and Reform Commission. According to the new edition of the “Catalog,” projects in steel, nonferrous metals, cement, fertilizers, shipbuilding facilities, as well as urban infrastructure projects such as municipal water supply, will no longer require approval and will instead be subject to filing management.

     For projects that have received high attention from local governments and enterprises—such as thermal power plants, combined heat and power plants, pumped-storage hydropower stations, newly built port areas, general aviation airports, expanded dual-use military-civilian airports, expanded primary oil refineries, iron ore development, and newly built ethylene plants—as well as certain hydropower stations, grid projects, and aircraft manufacturing projects, the new edition of the “Catalog” has delegated approval authority to provincial-level or local governments.

     In the field of foreign investment, to better align with the new edition of the “Catalog,” the National Development and Reform Commission, together with relevant departments, has revised the “Guidance Catalog for Foreign Investment Industries (2011).” The “Annual Report” has been revised and is currently open for public comment.

     “Next, we need to further strengthen supervision during and after the event, and establish a sound mechanism for vertical and horizontal coordination and collaborative regulation,” said Li Pumin, Secretary-General of the National Development and Reform Commission. According to the State Council’s notice, we must simultaneously devolve the authority for pre-approval procedures to address the issue of “lack of synchronization”; intensify efforts to standardize and normalize procedures, promptly streamline, integrate, and standardize various preconditions and intermediary services, thereby tackling the problem of “too many procedures and low efficiency”; and ensure that each department assumes its own responsibilities and carries out regulation in accordance with the law, thus resolving the question of “how to regulate.” We also need to accelerate the establishment of an online approval and regulatory platform for investment projects, as well as set up mechanisms for sharing post-approval regulatory information and for coordinated collaboration.

     Luo Guosan believes that the State Council 1 Revising the approval catalog twice within the year demonstrates the Party Central Committee and the State Council’s determination and confidence in deepening reform and delegating power to lower levels. In the future, the scope of filing will continue to expand, while the scope of approval will gradually shrink.

     Approval for overseas investment has been significantly abolished.

     Although the section on “foreign investment” in the new edition of the “Catalogue” contains fewer than one hundred characters, it is regarded as a landmark reform in China’s foreign investment management system.

     “The core of this reform in overseas investment is this: With the exception of a small number of projects subject to special regulations, all overseas investment projects will no longer require approval,” explained Gu Dawei, Director-General of the Foreign Investment Department of the National Development and Reform Commission. By “a small number of projects subject to special regulations,” we refer to those investments directed toward countries with which China has not established diplomatic relations, countries under international sanctions, regions and countries experiencing war or internal unrest, as well as projects in several sensitive industries—these are still required to undergo approval according to existing regulations. For all other projects, regardless of investment size or industry, approval requirements have been completely eliminated.

     Gu Dawei believes that this is necessary for China’s reform of the investment system and for further expanding its opening-up to the outside world. On the one hand, it can effectively promote the implementation of enterprises’ autonomy in investment decision-making; on the other hand, it can enable China’s economy to integrate more deeply into the global economy.

     The data shows that in 2013 China's total outbound investment in the year was 1078. In the first three quarters of this year, China’s outbound investment has already reached 84.92 billion U.S. dollars. It is projected that China’s total outbound investment for the entire year will approach or even exceed 120 billion U.S. dollars—a figure that is now comparable to or surpasses foreign investment in mainland China. “Moreover,” Gu Dawei said, “the reinvestment by Chinese overseas enterprises in third-party countries is currently not included in these figures. We believe that the gradual phasing out of approval requirements for overseas investment projects will further accelerate the pace at which Chinese companies go global.”

     Gu Dawei revealed that the Foreign Investment Department of the National Development and Reform Commission had, in 2013, ... Data on overseas investments for the year have been analyzed. If compared against the provisions of the new edition of the “Catalog,” with the exception of a few individual projects that require approval under special regulations, roughly 99%... Both the left and right projects have had their approvals canceled, which will significantly enhance the convenience of enterprises’ overseas investments.

     Will not trigger a new round of overcapacity.

     Some people are concerned that the new “Catalogue,” which replaces the approval process for projects in industries such as steel, cement, and nonferrous metals with a filing system, might trigger a new round of overcapacity. Li Zhongjuan, Deputy Inspector of the Industrial Department of the National Development and Reform Commission, believes that the country’s major project layout is now largely complete, and the measures taken by the state to curb the addition of new capacity in industries plagued by overcapacity are beginning to show results. A market environment that compels excess capacity to exit has already taken initial shape. By removing the approval requirement and delegating investment decision-making authority to enterprises, the reform will actually be more conducive to promoting industrial structural adjustment and transformation and upgrading.

     “At present, in industries such as steel, cement, electrolytic aluminum, and shipbuilding—where overcapacity is prevalent—the market demand has either reached a plateau or begun to decline. As a result, these industries are operating at near-zero profit margins, and some enterprises have even been forced to halt or partially suspend production. Consequently, companies’ willingness to expand capacity has significantly weakened, and their investment decisions have become more rational, with greater focus now shifting toward projects aimed at transformation and upgrading, as well as enhancing competitiveness,” said Li Zhongjuan.

     Meanwhile, the effectiveness of the country’s measures to curb new production capacity is beginning to show. According to statistics, this year... To 9 In the month, fixed-asset investment in industries suffering from overcapacity—such as steel, cement, electrolytic aluminum, and flat glass—decreased year-on-year by 5%, 14.4%, 31%, and 6%, respectively. From the perspective of investment structure, most of the funds were allocated to ongoing projects, with primary focus on projects aimed at structural adjustment, energy conservation and emission reduction, and deep processing of products.

     “After the cancellation of approval for investment projects in industries suffering from severe overcapacity, investors must now take both internal and external factors into account when making decisions, thus adopting a more cautious approach. At the same time, the elimination of the approval requirement has saved investors time previously spent on obtaining prior approvals, enabling enterprises to more effectively implement projects involving technological upgrades and structural adjustments,” said Li Zhongjuan. (Gu Yang)