New investment rules open doors
Updated: 2014-04-23 11:18
By Zhang Fan in New York (China Daily USA)
China's new regulations on overseas investments make it easier for Chinese companies to invest in the United States, investment experts said at a panel discussion.
"The regulation marks a huge progress in terms of the size of the investments from China that need to be approved by the government authorities," Henry H. Liu, partner of Pillsbury Winthrop Shaw Pittman LLP, said in the discussion on Tuesday that was held by the China General Chamber of Commerce-USA in New York.
China's National Development and Reform Commission (NDRC) recently issued a new version of Outbound Investment Project Approval and Filing Regulation, which increased the NDRC's approval authority from $300 million to $1 billion.
Zhang Linsen (center), vice-president and CFO of China Construction America, talks in a panel meeting held by China General Chamber of Commerce-USA in New York on Tuesday. Next to him are Henry H. Liu (right), partner of the Pillsbury Winthrop Shaw Pittman LLP, and Qing Hong (left), deputy general manager of ICBC New York Branch. Zhang Fan / China Daily
A Chinese overseas project with an investment of less than $1 billion in a non-restricted sector no longer needs to be approved but only to be "filed" to the NDRC, according to the regulation. Then the authority will issue letter of filing acceptance within seven business days.
Projects in the restricted category such as large-scale land development and grid will still need to be approved. The regulation does not give specific information about how the filing will be processed or detailed requirements the project should meet to get the file accepted.
"Such changes reduce the time we need to prepare for the materials required by NDRC for project approval. If the filing table is only one or two pages, our work will be much easier," said Zhang Linsen, vice-president and CFO of China Construction America.
China Construction America, a subsidiary of China State Construction Engineering Corp Ltd in the Americas, completed the acquisition of Plaza Construction recently.
"The government needs to give us more freedom and trust, but I understand its concerns because there are so many Chinese companies entering the US market," Zhang said.
"Overall it is a great step forward and definitely shows the government's good intentions to help companies move forward," Henry said.
He added that there are a few issues about the regulations that the authority should be able to address with some more detailed rules.
The new regulation is effective on May 8 and marks the third amendment since 2004 when China for the first time put forward its overseas investment regulation with "go-global" investment strategy.
Chen Xiaomin, a global partner of the DeHeng Law Offices, thinks that the regulation was issued because of the rapid development of China's foreign investment.
"China's outbound investment last year reached almost $100 billion, of which more than $14 billion is in the US alone, about a 30-percent jump than the previous year. Because of that, Chinese authorities issued a series of new regulations including this one," Chen said.
According to a report made by the Rhodium Group recently, Chinese investment in the US covers multiple fields including automobile, information technology and machinery equipment.
(China Daily USA 04/23/2014 page1)