In accordance with the State Council’s Opinions on Further Enhancing Foreign Investment Utilization (State Council, No.23, 2019), and to advance foreign investment in key sectors of Shanxi Province, the following measures are proposed:

I. Expand Opening-up

Manufacturing Sector: The province will remove foreign equity limits in commercial vehicle manufacturing, allowing foreign investors to establish wholly-owned or majority-owned production enterprises. By 2022, these restrictions will be lifted for passenger vehicle manufacturing, permitting foreign investors to establish multiple joint ventures for similar products. Equal market access will be ensured for domestic and foreign new energy vehicle manufacturers. A parallel management system for average fuel consumption and new energy vehicle credits will be implemented, allowing regulated credit transfer among foreign-invested enterprises. Foreign investment in the manufacturing of trunk aircraft, regional aircraft, general aviation aircraft, helicopters, drones, and airships is encouraged.

Service Sector: Restrictions on the business scope of foreign financial institutions—including banks, securities firms, and fund managers—will be removed. The requirement that the sole or main shareholder of China-foreign joint venture banks be a financial institution will be abolished. Limits on foreign ownership ratios in securities firms, fund managers, futures companies, and life insurers will be lifted. Requirements on operating duration and total assets for foreign insurance brokers, as well as asset thresholds for foreign banks establishing wholly foreign-owned banks or branches will be eliminated. Foreign banks may establish both wholly foreign-owned banks and branches, or China-foreign joint venture banks and branches simultaneously in Shanxi province. Support will be provided for these banks to engage in agency issuance, payment, and underwriting of government bonds, including those issued by foreign governments in China. Foreign investment in infrastructure construction—such as railway, power grids, urban gas, heating, and water supply networks—is encouraged. Investment in telecommunications value-added services, including multi-party communication, data storage and forwarding, and call centers is also supported. Foreign investors are encouraged to establish wholly foreign-owned enterprises in gas stations, grain procurement and wholesale and construction.

Other Industries: We support wholly foreign investment in unconventional natural gas exploration and extraction. Foreign investment in wheat breeding and seed production is encouraged, provided Chinese ownership is at least 34%.

II. Promote Foreign Investment in Key Industries

We encourage foreign investment in strategic emerging industries including semiconductors, big data integration, optoelectronics, photovoltaics, carbon-based materials, bio-based materials, specialty metals, advanced rail equipment, intelligent coal machinery, smart connected vehicles, general aviation, modern biomedicine, and energy conservation. A preferential electricity tariff of 0.3 yuan per kWh applies to users with a voltage at or above 110 kV. Investment in green energy, modern facilities, agricultural processing, cultural tourism, and modern productive services is also encouraged.

Taiyuan prioritizes foreign investment in urban construction. Datong focuses on general aviation and biopharmaceuticals. Luliang and Jincheng emphasize unconventional natural gas. The Provincial Department of Transportation promotes key projects and attracts foreign investment via PPP (Public-Private Partnership) and BOT (Build-Operate-Transfer) models, especially for toll roads. The provincial state-owned assets operation company facilitates foreign M&A in energy and power sectors involving state-owned enterprises.

III. Reward Actual Utilization of Foreign Investment Projects

Foreign investment projects or registered enterprises with actual foreign capital exceeding USD 10 million will receive a reward equal to 5% of the invested amount in RMB, capped at RMB 10 million per enterprise. Multinational companies with asset size exceeding USD 50 million that establish regional headquarters or headquarters-type institutions in the province will be rewarded 10% of their registered capital, also capped at RMB 10 million per enterprise. Funding will be sourced from the existing investment attraction budget. This policy applies from 2021 to 2023.

IV. Reward Various Think Tanks for Participating in Foreign Investment Promotion

International accounting firms, consulting firms, investment banks, and other institutions or associations that facilitate foreign investment projects exceeding USD10 million through contracts will receive a reward of 1% of the actual foreign investment amount in RMB, capped at RMB 1 million. Only one intermediary will be recognized per project. Investors are not eligible to claim rewards as intermediaries for their own projects. Funding will be sourced from the existing investment attraction budget. This policy applies from 2021 to 2023.

V. Improve Convenience for Foreign Investment

Approval and record-keeping requirements for foreign-invested enterprises will be abolished and replaced by an information reporting system. Market regulatory departments in district-level cities and national economic development zones will be authorized as registration authorities for foreign-invested enterprises. Procedures will be streamlined to ensure registration is completed within three working days. Authority for filing foreign investment projects will be delegated to relevant departments in district-level cities and provincial development zones. Provincial development zones must implement a “lead and assist” system to provide high-quality services to foreign-invested enterprises and projects.

VI. Leverage the Role of Open Platforms

Support the Shanxi Comprehensive Reform Demonstration Zone and the Changzhi High-tech Industrial Development Zone in establishing China-Germany International Cooperation Parks, focusing on semiconductors, advanced equipment manufacturing, new-generation information technology, synthetic biology, high-end CNC machine tools, new materials, energy conservation, new energy vehicles, and high-performance medical devices.

Encouraged the Datong Economic and Technological Development Zone to attract aircraft R&D and manufacturing projects from Germany, Belgium, and the United States, and to develop a General Aviation International Cooperation Park.

Support the Jinzhong Economic and Technological Development Zone in attracting international capital, technology, talent, and projects, centered on Zhongding Logistics Park, to create the Jinzhong International Cooperation Park.

Assist the Jincheng Economic and Technological Development Zone in establishing a China-Japan Optoelectronics International Cooperation Park to attract leading companies in optical communication, LCD panels, semiconductors, optical chip packaging and testing, precision molds, and big data.

Enhance the functions of the Wusu Comprehensive Bonded Zone, Lanhua and Fanglue Bonded Logistics Centers, and cross-border e-commerce pilot zones in Taiyuan and Datong, focusing on R&D, logistics, sales, and remanufacturing.

VII. Organize Foreign Investment Promotion Activities

Collaborate with central provinces to host the Central China Investment and Trade Expo. Organize the China (Taiyuan) Energy Industry Expo, Taiyuan Energy and Low-Carbon Development Forum, Yaocheng (Taiyuan) International General Aviation Airshow, and Dahe Civilization Tourism Forum. Conduct a series of activities for multinational companies visiting Shanxi. Provide financial support for national and international conferences, exhibitions, and forums in accordance with regulations.

VIII. Conduct Foreign Investment Project Scheduling

Provincial and municipal governments shall establish dedicated foreign investment teams to implement project tracking for key initiatives. This includes all stages: negotiation, contract signing, new registrations, and reinvestment by existing enterprises, ensuring timely resolution of operational and construction issues.

Provincial teams must strengthen support for large cross-regional projects regarding land, energy, and funding. Improve the foreign investment scheduling system with monthly reports on key investment indicators by city.

IX. Conduct Policy Promotion and Interpretation

Carry out training and outreach on the Foreign Investment Law and its Implementation Regulations. Publish investment guides to promote the province’s favorable policies, business environment, and industrial projects, facilitating foreign investors.

Establish a policy dissemination system to communicate supportive measures and enhance explanations of talent attraction, financial support, and service provision policies.

X. Protect the Legal Rights and Interests of Foreign Investment

Annually review and assess foreign investment policy implementation, encouraging local governments to adopt supporting measures and improve the policy framework. Conduct legal reviews of administrative regulations affecting enterprises, solicit feedback from foreign investors and industry associations, and enhance policy predictability and transparency. Establish rapid intellectual property rights (IPR) protection and joint credit punishment mechanisms, advance IPR dispute mediation, and develop diversified resolution channels. Encourage foreign-invested enterprises to participate in local standards development to improve the scientific basis and transparency of industry norms. Eliminate discriminatory government procurement regulations related to foreign investment, ensuring equal access to procurement information for all suppliers. Optimize regulatory approaches by rationalizing inspection frequency, promoting combined inspections, and refining administrative penalty criteria to reduce compliance costs. Set up a complaint mechanism addressing administrative licensing, supervision, enforcement, and policy issues, with major complaints tracked through the “13710” system. Serious violations harming foreign investors’ rights will be referred to judicial authorities for criminal accountability.

People’s Government of Shanxi Province

August 20, 2021