Dr. Constanze Wang
Head of Government Affairs & Advocacy
+86-21-3858 5010 wang.constanze@china.ahk.de
Policy Snapshot - Recent National and Regional Policies in China
February 26, 2025
Foreign Trade & Investment
2025 Action Plan for Stabilizing Foreign Investment
The Ministry of Commerce and the National Development and Reform Commission issued a new action plan to stabilize foreign investment. The plan encourages foreign companies to engage in equity investments in China, attracting more foreign capital towards long-term investment in Chinese-listed companies and develop policies to encourage reinvestments by foreign companies in China. Moreover, it also reiterates further upgrading and expanding pilot programs for opening up value-added telecommunications, biopharmaceuticals, and independent hospitals.
Our take: Compared with the 2024 action plan, the emphasis seems to be now on stabilizing instead of increasing investment, following last year’s unsatisfying foreign investment figure. This year’s action plan highlights the reinvestment of foreign companies in domestic production capabilities by easing their financing restrictions. We welcome this action plan to send a positive signal to the foreign business community. However, to improve the investment confidence of German companies, it is necessary to fully implement these measures on the ground.
The 2025 Action Plan for Stabilizing Foreign Investment
Import Tax Policy Catalogs for Major Technical Equipment Adjustments
The Ministry of Industry and Information Technology, together with four other departments, issued a joint notice to adjust the import tax policy catalogues for major technical equipment. The notice pertains to three catalogues: Catalogue of State-supported Key Technical Equipment and Products (2025 Edition); Catalogue of Imported Key Components and Raw Materials of Key Technical Equipment and Products (2025 Edition) and Catalogue of Imported Major Technical Equipment and Products Not Exempted from the Duties (2025 Edition) .
Our take: The adjustments of China's tariff plans align with the goals of industrial development, supply chain stability, and promoting a balanced trade by importing more high-quality and competitive products.
Notice on Adjusting the Relevant Catalogue of Import Tax Policies for Major Technical Equipment
Business Environment
Personal Information Compliance Audits
The Cyberspace Administration of China finalized the Administrative Measures for Personal Information Protection Compliance Audits. China requires organizations handling personal data to regularly conduct compliance audits, and the measures specifically mandate that companies processing the personal information of more than 10 million people undergo audits every two years.
Our take: Compliance with China’s personal information protection framework will be less burdensome than expected, as the draft version required audits at least every two years for all companies. This is good news for companies already dealing with complex data export rules and aligns with the broader trend toward relaxing data regulations.
Administrative Measures for Personal Information Protection Compliance Audits
Three-Year Action Plan for Optimizing the Consumption Environment
The State Administration for Market Regulation of China, together with four other departments issued an action plan on optimizing the consumption environment from 2025 to 2027. Key priorities include stronger antitrust measures, a better credit system, enhanced intellectual property protection, and tighter oversight of digital platforms on behaviors like eliminating false advertising, price fraud, online scam, and low quality goods.
Our take: Improving the consumer market environment aligns with China’s efforts to establish a unified national market and further drive economic growth. However, boosting consumer confidence and addressing weak domestic demand remain long-term endeavors for the Chinese government.
Three-Year Action Plan for Optimizing the Consumer Environment (2025–2027)
Green Development
Promoting Manufacturing of New-Type Energy Storage
The Ministry of Industry and Information Technology and seven other government departments issued the Action Plan for promoting manufacturing of the New-Type Energy Storage (NES). This initiative aims to boost technological innovation in the sector including upgrading mature technologies like lithium batteries. By 2027, China plans to build a global competitive edge across the entire NES manufacturing supply chain, develop three to five leading companies capable of dominating their respective NES industrial ecosystems.
Our take: Integrating more energy storage will significantly contribute to China’s energy transition, including the grid’s flexibility and ability to utilize renewable energy. It reaffirms China’s attempts to achieve the 30/60 goals via a stronger push towards green energy technology.
Action Plan for the High-Quality Development of New-Type Energy Storage Manufacturing
Archive
January 6, 2025
Policy Snapshot - Recent National and Regional Policies in China (2025/01/06)
Export Restrictions on Technologies Related to Lithium Battery and Gallium
The subsidiary of the Ministry of Commerce (MOFCOM) called for comments on the revisions on the Catalogue of Prohibited and Restricted Technology Exports. These amendments removed export bans or restrictions involving traditional Chinese architectural techniques and added export controls on certain technologies for producing battery cathode materials, as well as lithium and gallium extraction technologies.
Our take: In light of growing global trade tensions, China is increasingly utilizing and adopting its foreign trade measures. German companies are directly or indirectly impacted by them. While the new catalog is still in the drafting process, it will be crucial for German companies to closely monitor its implementation timeline to adapt to potentially needed supply chain changes.
China's First Basic Standards for Corporate Sustainability Disclosures
The Ministry of Finance (MoF), the National Development and Reform Commission (NDRC), and the China Securities Regulatory Commission (CSRC) issued the Corporate Sustainability Disclosure Standards – Basic Standards (Trial). These standards define the objectives of corporate sustainability disclosures, the primary users of sustainability information, and other key stakeholders. While specific implementation guidelines are yet to be provided, companies are encouraged to voluntarily adopt the standards to promote sustainable business practices.
Our take: This marks the country’s first comprehensive framework for corporate sustainability reporting and aligns with China's broader efforts to enhance corporate transparency and accountability in environmental, social, and governance (ESG) matters. German companies and their suppliers should prepare in advance to comply with potential future ESG disclosure requirements based on the Standards.
Corporate Sustainability Disclosure Standards – Basic Standards (Trial)
Further Streamlining Approval Process for Innovative Drug and Medical Device
The State Council issued the Opinion on Comprehensively Deepening the Reform of Regulation of Drugs and Medical Devices, aiming to enhance support for drug and medical device innovation through regulation adjustments. The opinions call for more approval efforts in innovative drugs and medical devices urgently needed in clinical practice. Notably, it sets the framework for streamlining the approval process for transferring the manufacturing of internationally approved drugs and medical devices from overseas to domestic production.
Our take: This can be seen as a strive to enhance the high-quality development of China’s pharmaceutical and medical sector. German companies can provide innovative and top-quality products in these industries. The opinions will hopefully help to speed up their market access and approval by giving more guidance to local authorities.
Opinions on Comprehensively Deepening the Reform of Regulation of Drugs and Medical Devices
January 21, 2025
Policy Snapshot - Recent National and Regional Policies in China (2025/01/21)
Policy Plan for Equipment Renewal and Consumer Goods Trade-in
The National Development Reform Commission (NDRC) and the Ministry of Finance (MOF) issued their 2025 policy plan on large-scale equipment renewal and trade-in program for consumer goods. The plan expands support for equipment renewal in sectors like electronic information, workplace safety, and facility agriculture, focusing on high-end, intelligent, and green equipment. It also includes subsidies for the trade-in of more home appliance categories and digital products.
Our take: China officially announced equipment renewal and consumer goods trade-ins in March 2024, aiming to boost investment, consumption, and economic growth. This year, the initiative remains significant items on the economic agenda, with an expanded scope of financial support and enhanced efforts in green and intelligent development. German companies should continue to actively participate in the policy program to expand their business opportunities.
Beijing Eases Market Access for Foreign Investment in VATS
The State Council approved the temporary adjustment of some administrative regulations and policies to further expand market access in the service sector for foreign investment in Beijing. Key measures include lifting foreign equity ratio restrictions on specific value-added telecommunications services (VATS), such as information services (limited to application stores and excluding prohibited sectors) and internet access services (limited to providing internet access for users) in the city.
Our take: The Ministry of Industry and Information Technology launched a pilot program last October to remove restrictions on VATS in selected regions. VATS has long been a key item on the negative list for foreign investment. As a pilot region for service sector opening-up, Beijing is now making notable progress in this area.
Guidelines for Building a National Unified Market
The NDRC released a trial guideline on building a national unified market, which mandates local authorities to prevent or rectify unfair policy formulation and enforcement on businesses. This includes ensuring that local laws and policies related to market entry, bidding, procurement, investment, and business operation comply with fair competition review requirements and avoiding the implementation of fiscal, tax, pricing and other incentives for investment promotion that violate national standards or regulations.
Our take: Since the policy campaign in building a national unified market launched in 2022, continuous efforts have been made to advance this initiative. This year, it has gained particular emphasis as one of the key tasks outlined in the Central Economic Work Conference. This trial guideline aims to provide clearer "working directions" for local governments, though its implementation at the ground level remains to be seen.
The Guideline for Building National Unified Market (Trial)
February 12, 2025
Policy Snapshot - Recent National and Regional Policies in China (2025/02/12）
Further Enhancing Opening-Up in Financial Sectors
The People’s Bank of China and five other government departments issued the Opinions on Advancing Institutional Opening in the Financial Sector to Align with High International Standards in Pilot Free Trade Zones (Ports). The Opinions outline 20 policy measures, including facilitating the inward and outward transfer of funds for foreign investors and improving arrangements for cross-border financial data flows in China’s free trade zones and ports.
Our take: While this is another initiative from the Chinese government to boost foreign investor confidence and attract more foreign capital, its impact will depend on an efficient implementation of the outlined measures and how well it aligns with broader economic and financial stability goals.
Consumer Goods Trade-In Program on Vehicles
The Ministry of Commerce (MOFCOM) issued the Notice on Properly Carrying Out the 2025 Vehicle Trade-in Program. Consumers can receive up to CNY 20,000 for scraping an old vehicle and purchasing a new electric vehicle (EV), or up to CNY 15,000 for buying a new internal combustion engine (ICE) vehicle with an engine smaller than 2.0 liters. Those who sell their old vehicles also can qualify for reduced subsidies, with up to CNY 15,000 for an EV upgrade and CNY 13,000 for an ICE upgrade.
Our take: This is the implementation guideline for the 2025 vehicle trade-in program, aligning with the 2024 framework with no significant changes in subsidy design. It reflects the continued support for the green development in the automotive industry and the attempt to boost consumption of big-ticket-items.
Notice on Properly Carrying Out the 2025 Vehicle Trade-In Program
Green Technology Promotion Catalogue
The National Development and Reform Commission (NDRC), together with seven other ministries, compiled the Green Technology Promotion Catalogue (2024 Edition). The catalogue has selected 112 advanced green technologies in seven industries like environmental protection, resource recycling, energy transformation, ecological protection, green infrastructure, and green services.
Our Take: This is the first update in four years to China's Green Technology Promotion Catalogue, which identifies green technologies that will more easily qualify for green financial support. Additionally, the chinese authorities released the Green Industry Catalogue last year, providing a framework for identifying eligible green projects and activities.