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The Catalogue for Encouraging Foreign Investment in Industries is the "carrot" counterpart to China's Negative List for Foreign Investment Access (see the paired 2024-09-06 Negative List filing, Order No. 23). Where the negative list defines sectors that are closed, capped, or JV-restricted for foreign capital, the encouraged catalogue lists sectors where foreign-invested enterprises (FIEs) qualify for import-duty exemptions on equipment for self-use, VAT refunds, and other fiscal incentives administered through NDRC/MOFCOM approval. Enterprises operating in listed sectors — and, for the regional annex, physically located in the covered provinces — self-declare against the catalogue to claim the preferences; there is no case-by-case negotiation.
Order No. 37 (signed by NDRC Chair Zheng Shanjie and MOFCOM Minister Wang Wentao, approved by the State Council, announced 24 December 2025, effective 1 February 2026) is the first update since the 2022 Edition. Per NDRC's own account of the revision:
1. Scale. Total entries rise to 1,679 — net +205 versus 2022, with 303 existing entries modified. This is one of the larger revisions in the catalogue's periodic-update history (prior editions: 2017, 2019, 2020, 2022). 2. Split structure preserved. The nationwide catalogue (applies anywhere in China) grows to 619 entries (+100, 131 modified); the regional catalogue (central/western provinces, the northeast, and Hainan — a narrower incentive layered on top of the nationwide list to steer investment inland and toward the Hainan Free Trade Port) grows to 1,060 entries (+105, 172 modified). 3. Sector emphasis. NDRC's official interpretation frames the update around three priorities: (i) advanced manufacturing, (ii) modern services, and (iii) investment in central/western China, the northeast, and Hainan — consistent with Beijing's "Stabilizing Foreign Investment" agenda and its 2025 Action Plan on attracting FDI amid a multi-year inbound-FDI flow slowdown.
The GTA record underlying this filing tags the release under two intervention types — financial incentive and tax/social-insurance relief — reflecting that a single catalogue release generates multiple GTA entries keyed to different sector clusters within it. This filing covers the catalogue as a single instrument; subsequent GTA-sourced queue items referencing the same Order No. 37 release should be treated as duplicates of this action rather than filed separately.
Severity 3, basis quant. The catalogue is economy-wide in scope (1,679 entries touching most tradable sectors) and the numeric revision (net +205 entries, 303 modified, split across two sub-catalogues) is the largest since 2020. It is not rated higher because the instrument is incentive-only — it does not compel behaviour, restrict market access, or carry penalties — and because the marginal effect on realised inbound FDI is uncertain given China's multi-year FDI inflow slowdown (the same caveat noted in the paired 2024 Negative List filing). Severity is set in line with that companion filing (severity 3) rather than higher, since both sides of the architecture (negative list + encouraged catalogue) are being revised on a similar cadence and neither alone is a step-change in policy stance.
List (effective Nov 2024) and this 2025 Encouraged Catalogue (effective Feb 2026) together define China's current FDI market-access perimeter — the answer to the open question left in the negative-list filing about how the two instruments interact in advanced-manufacturing sub-sectors (semiconductors, EV, advanced battery) is that they continue to run on separate, staggered update cycles rather than being harmonised into one document.
Hainan regional catalogue (1,060 entries vs. 619 nationwide) signals continued policy priority on inland FDI diversification away from the coastal provinces — relevant context for read-throughs on China's domestic-demand and regional-rebalancing industrial policy.
HS/industry codes were added) sits behind the NDRC's attached PDF/OFD annex, not the notice text itself; a future filing could dig into whether critical-minerals processing, battery materials, or semiconductor equipment sub-sectors were added or upgraded within the advanced-manufacturing tier.
or does the geopolitical-risk premium continue to dominate as it did after the 2024 Negative List liberalisation?
added to the nationwide or regional catalogue annexes — this would sit at the intersection of this theme and the China minerals counter-strike theme and would warrant cross-tagging?
so should this filing's target_sectors list be expanded to capture them under this single slug?