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Qualification of Foreign Company
to Railway Construction in China
Question:
Is a foreign company allowed to make investment in railway construction in
China?
C.B.L. July 5, 2005
Answer:
Followings are provided by Catalogue for the Guidance of
Foreign Investment Industries (revised 2004)外商投资产业指导目录(2004年修订)(promulgated
Nov 30, 2004 by both National Development and Reform Commission of PRC, and
Ministry of Commerce of PRC, which come into effect Jan 1, 2005):
"Catalogue of Encouraged Foreign Investment
Industries
"VI. Communication and Transportation, Storage, Post and
Telecommunication Services
"1. Construction and management of grid of national trunk
railways (Chinese partner shall hold the majority of shares)
"2. Construction and management of feeder railways, local
railways and related bridges, tunnels and ferry facilities (equity joint
ventures or contractual joint ventures only)"
Above provisions means that
1) foreign investors are encouraged by PRC government to invest
in the industries of construction and management of grid of national trunk
railways in China, but Chinese partner shall hold the majority of shares and
foreign partner shall hold the minority of the shares, and
2)foreign investors are also encouraged to invest in the
industries of construction and management of feeder railways, local railways
and related bridges, tunnels and ferry facilities in China, with conditions
that the form of investment enterprises shall be only sino-foreign equity
joint ventures or sino-foreign contractual joint ventures but wholly foreign
owned enterprises.
Above words are for your reference.
- Wang Xuanjun July
5, 2005
Note: All answers here are for reference. Mr. Wang shall
have neither liability nor responsibility to any party for any loss or damage
caused or alleged to caused by the use of the answers without written
confirmation to the party.
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