Approved by Premier Li Keqiang, the State Council recently issued the "Catalogue of Government Approved Investment Projects (2016 Edition)" (hereinafter referred to as the "Catalogue").

This revision of the Catalogue is the third revision made by the State Council after two revisions in 2013 and 2014. This is an important measure to implement the "Opinions of the Central Committee of the Communist Party of China and the State Council on Deepening the Reform of the Investment and Financing System" and the "Notice of the State Council on Issuing the Key Points for Promoting the Reform of Streamlining Administration, Delegating Power, Streamlining Regulation, and Optimizing Services in 2016". It is of great significance for effectively transforming the government's investment management functions, establishing the status of enterprise investment entities, and stimulating the vitality of market entities to expand reasonable and effective investment and innovation and entrepreneurship. The revision of the Catalogue follows the following main principles: firstly, to fully leverage the role of the market and minimize the scope of approval. The second is to reasonably divide the responsibilities of the central and local governments, and fully leverage the role of local governments. The third is to comprehensively use various means to improve and strengthen macroeconomic regulation.

In this revision of the Catalogue, a total of 17 approval authorities have been cancelled or delegated, including 2 cancelled approvals changed to filing and 15 delegated to local governments for approval. According to calculations, including the two revisions in 2013 and 2014, the cumulative reduction ratio of enterprise investment projects approved by the central government has reached about 90% of the original total. One is to cancel the approval and replace it with record management for cross provincial (regional, municipal) projects invested by China Railway Corporation, mainline projects in the national railway network, and independent highway, railway bridge, and tunnel projects mainly funded by China Railway Corporation without crossing borders. Secondly, the newly planned projects such as oil refining, cross provincial (regional, municipal) local railways, highways, independent highway bridges, tunnels, coal ore oil and gas dedicated berths, container dedicated terminals, inland shipping and avionics hubs, rare earth mine development, coal to olefin, coal to methanol, rare earth smelting and separation, new automobiles (excluding pure electric passenger vehicles), vehicle engines, urban road bridges, tunnels, large theme parks, etc. will be delegated to provincial or local governments for approval. Thirdly, the restricted projects with a total investment (including capital increase) of 100 million US dollars (including 100 million US dollars) to 300 million US dollars in the "Catalogue for Guiding Foreign Investment Industries" will be delegated to provincial governments for approval.

This revision of the Catalogue places greater emphasis on promoting the construction of supporting systems after the decentralization of power. One is to strengthen the guidance of policy conditions. Give full play to the normative and guiding role of development planning, industrial policies, and admission standards in investment activities. The second is to strengthen in-process and post event supervision. Adhere to the principle of "who approves, who supervises, who is in charge, who supervises", focus on leveraging the convenient regulatory role of local governments, the advantages of industry management departments, environmental protection, quality supervision, safety supervision and other departments, as well as the comprehensive regulatory functions of investment supervisory departments, to achieve coordinated supervision. Strictly control projects such as steel, electrolytic aluminum, cement, flat glass, ships, coal mines, and traditional fuel vehicles. The third is to prevent the approval matters of local governments from experiencing a "free fall". Each provincial government shall formulate a unified directory of government approved investment projects within its administrative region, adhering to the matching of decentralization levels and undertaking capabilities. For projects involving major planning and layout, as well as important resource development and allocation in the local area, they shall not be delegated to the municipal government in principle, and shall not be delegated to the county-level or lower level government for approval.