China unveils new wanted, not-wanted industry list

BEIJING (Reuters) - China's economic planning agency on Monday published a new list of industries that it would encourage, restrict or ban, a blueprint that could have a far-reaching impact on investment activity China over the coming years.

The list will serve as a guideline for Chinese regulators in making policies on tax, bank credit, land and trade, and will also be a reference for Beijing to decide which foreign investors are welcomed.

In a statement summarizing the new guidelines, the National Development and Reform Commission (NDRC), said the list makes changes to the previous version, published in December 2005, to reflect technological change and industrial development.

"Some steel, non-ferrous and construction material products have seen serious over-capacity, for which we will no longer encourage ordinary capacity in these areas," the NDRC said.

For projects in sectors listed as "to be encouraged", investors often find it easy to obtain approval from the government, in addition to cheap bank loans and land as well as preferential tax treatment.

But for industries labeled as "restricted" or "to-be-eliminated", investors will find it hard to get governmental approval for new projects and to maintain operation. For example, such projects would be the first to be cut off at times when electricity is restricted because of power shortages.

The updated list has added new energy, inner-city railway transport equipment and public security devices into the "encouraged" category.

Automatic control systems for vehicles, high-speed precision bearings as well as key parts for new-energy vehicles will also be encouraged, according to the statement on the planning agency's website,

A detailed version of the list was not immediately available.

The previous list published in 2005 is available in Chinese at

(Reporting by Zhou Xin and Tom Miles; Editing by Alex Richardson)