Guangdong to open logistics industry to overseas investment

The Chinese Ministry of Foreign Trade and Economic Cooperation has chosen south China’s Guangdong Province as one of the first regions to be opened to overseas investment in the logistics sector.

According to sources with the Guangdong Foreign Trade and Economic Cooperation Department, the opening up will be conducted on a trial basis and will also be introduced to east China’s Jiangsu and Zhejiang provinces and major Chinese cities like Beijing, Tianjin, Chongqing, Shanghai and Shenzhen.

Overseas investors will be permitted to set up logistics firms and invest in international logistics businesses as Sino-foreign cooperative ventures or Sino-foreign joint ventures. Registered capital from these enterprises must be no less than US$5 million.

China previously required foreign-funded logistics firms to have at least 100 million RMB yuan (US$12.05 million) in registered capital.

“The new policy has greatly lowered the threshold at which international logistics enterprises can invest in China,” said Han Panyan, deputy head of Foreign Investment Examination and Approval Section of the Guangdong Foreign Trade and Economic Cooperation Department.

However, the new policy specifies that overseas investors are permitted to hold no more than 50 per cent of the enterprise’s shares, and the term of the business license for such enterprises will usually not exceed 20 years.

Currently, a number of foreign logistics firms, such as the US-based FedEx, have factories and subsidiaries in China.