China to allow wholly-owned foreign steel plants in four free trade zones
Beijing will allow foreign companies to set up wholly-owned steel manufacturing units in four pilot free trade zones, as part of a policy relaxation designed to attract foreign investment in various industries.
Foreign firms will no longer be subject to various qualification requirements and stake control restrictions when investing in China’s steel industry, according to a circular by the State Council posted on the central government’s website on Tuesday.
“The ban on foreign controlling shareholding and qualification hurdles imposed on foreign investors will be cancelled temporarily,” the circular said. “The establishment of foreign wholly-owned steel manufacturing firms will be allowed.”
Ultimately China wants to attract foreign investment to set up highly efficient firms to produce higher-end steel products
The relaxation applies to the pilot free trade zones in the municipalities of Shanghai and Tianjin, as well as Guangdong and Fujian provinces.
Regulations will be revised by the Ministry of Industry and Information Technology and other relevant authorities, it added.
The policy change comes a week after European manufacturers pressured European Union leaders at a bilateral summit in Beijing to take a tough stance with China on industrial overcapacity and the potential granting of market economy status to China later this year.
Thirty European industrial associations have accused Chinese manufacturers of dumping products, overbuilding production capacity and alleged Chinese central and local governments of giving “illegal” subsidies to manufacturers to expand capacities.
