The State Council has released the Several Opinions on Promoting Fair Competition and Maintaining Regular Order in the Market (the “Opinions”) (in Chinese, “关于促进市场公平竞争维护市场正常秩序的若干意见”) on July 8, 2014.
On June 17, 2014, the Ministry of Commerce (the “MOFCOM”), the major regulator of foreign investment in China, issued the Notice on Improving Foreign Investment Review Administration (商务部关于改进外资审核管理工作的通知) (the “MOFCOM Notice”) to make it clear that registered capital contribution requirements for foreign invested enterprises (“FIEs”) have been relaxed.
On May 19, 2014, the State Administration of Foreign Exchange (“SAFE”) released Notice on the Promulgation of Foreign Exchange Administration Rules on Cross-border Guarantee (国家外汇管理局关于发布《跨境担保外汇管理规定》的通知) (“Circular 29”) with a view to promoting cross-border guarantee activities and convertibility under capital accounts. Circular 29 took effect on June 1, 2014 and twelve other SAFE regulations regarding cross-border guarantee will be abrogated.
China Securities Regulatory Commission (the “CSRC”) issued a notice on May 9, 2014 to seek public comments for the Administrative Measures on the Acquisition of Unlisted Public Companies (Draft for Comment) (hereinafter referred to as the “Acquisition Measures“).
On December 2, 2013, the State Council issued the Circular Concerning Catalogue of Investment Projects Requiring Government Approval (2013 Version) (国务院关于发布政府核准的投资项目目录（2013年本）的通知) (the “2013 Catalogue”) and introduced new changes to governmental approvals falling under the jurisdictions of the two approving authorities, the National Development and Reform Commission (“NDRC”) and the Ministry of Commerce (“MOFCOM”). The objective is to overhaul China’s decades-old, approval-based cross-border investment regulatory system that has restricted growth. The liberating effects from less approval requirements are deemed to bring a new boom in outbound investment to both private investors and Central SOEs (state-owned enterprises managed by the central government), covering a wider range of industries apart from natural resources related industries traditionally favored by Central SOEs.
This past November and December, the US Department of Justice (“DOJ”) and European Commission (“EC”) cleared Microsoft Corporation’s (“Microsoft”) acquisition of the bulk of the devices and services business of Nokia Corporation of Finland (“Nokia”) without any conditions. In contrast, on April 8, 2014, the Chinese Ministry of Commerce (“MOFCOM”) approved the acquisition subject to conditions that include an intellectual property issue that is still to be resolved in the US, EU and other countries: whether holders of standard essential patents (“SEPs”) who make licensing commitments under fair, reasonable and nondiscriminatory (“FRAND”) terms should be barred from seeking injunctive relief against alleged infringers of their patents. MOFCOM’s conditional approval is not controversial for this specific transaction, but raises the question of how MOFCOM’s treatment of this issue will be interpreted in future merger reviews and whether this will affect investigations related to anticompetitive conduct.
The Regulations on Supervision and Administration of Medical Devices was amended and promulgated by the State Council on March 7th, 2014, effective June 1st, 2014. The last version is from 2000. The following highlights the changes that have been made.
Domestic Chinese private equity managers should take notice of new provisional regulations requiring registration of domestic Chinese private equity managers and filings with the Asset Management Association of China (“AMAC”). Also, Chinese private equity managers should take notice of an impending deadline to register with AMAC.
Stricter Blacklist Regime
On December 25, 2013, the National Health and Family Planning Commission of China (“National Health Commission”, former Ministry of Health) issued the amended Provisions Regarding the Establishment of Commercial Bribery Blacklist in the Pharmaceutical Purchase and Sales Industries (“Blacklist Provisions”), which came into effect on March 1, 2014.
On February 7, 2014, the State Council issued Notice on Reform Plans of Registration Policies of Registered Capital, GuoFa  No. 7 (the “Notice”) providing guidelines on business registration reforms of companies in China. The objective of the reform is to relax the administration on market entry and optimize the business investment environment.