The State Council promulgated the Decision on the Temporary Adjustment of the Relevant Administrative Approval Items and Access-Related Special Administrative Measures in Beijing (the “Decision”) on December 10, 2017. The Decision temporarily adjusts the administrative approval items and access-related special administrative measures with respect to foreign-invested performance venues, entertainment venues, banks, civil aviation and production of audiovisual products in Beijing from December 10, 2017 through May 5, 2018. Specific details are highlighted below:
1. With respect to foreign-invested performance venues, Article 10 of the Regulations on the Administration of Commercial Performances originally provides that investment in an entity operating a performance venue can only be done through a Sino-foreign joint venture or Sino-foreign cooperation of which the Chinese investor holds no less than 51% of the shares. In this Decision of the State Council, the foreign investment restriction is relaxed, meaning foreign investors are no longer subject to the investment percentage restriction in its investments in the above industry operating in specific zones in Beijing where cultural and entertainment enterprises are concentrated.
2. With respect to foreign-invested entertainment venues, previously Article 6 of the Regulations on the Administration of Entertainment Venues requires investment in the form of Sino-foreign joint venture or Sino-foreign cooperation. Under the above Decision, investment may be made in special zones in Beijing where cultural and entertainment enterprises are concentrated without being subject to any investment percentage restriction.
3. With respect to foreign-invested banks, the Decision temporarily adjusts Article 34 of the Regulations of the People’s Republic of China on the Administration of Foreign-invested Banks and allow newly established or restructured fully foreign-funded banks, Sino-foreign joint venture banks or branches of foreign banks to apply for engaging in RMB business at the same time as the establishment application without needing to have been open for business for one year.
4. With respect to foreign-invested civil aviation enterprises, the Decision temporarily adjusts Article 3 of the Provisions on Foreign-invested Civil Aviation Enterprises and allows foreign investment in aviation transportation sales service agencies.
5. With respect to foreign investment in the production of audiovisual products, the Decision temporarily adjusts Item 22 in the Catalogue of Industries Prohibited from Foreign Investment under the Catalogue for Guidance of Foreign-invested Industries and allows foreign investment in the production of audiovisual products. However, such business must be a cooperative within the Beijing National Music Industry Base, the China Beijing Publishing Creative Industry Park, and the Beijing National Digital Publishing Base. In addition, the Chinese side shall have control of the business operations and the final say to the contents.
The Beijing Municipal Bureau of Culture has announced details of the specific matters reviewed when foreign-invested entertainment venues are involved. The specific applicable zones or areas include the establishment, amendment, renewal, cancellation or supplementary certification of fully foreign-funded, Sino-foreign joint venture or Sino-foreign cooperative entertainment venues in the Beijing Chaoyang National Cultural Industry Innovation Experimental Zone in the Chaoyang District, the Fengtai Park of the Zhongguancun Science Park in the Fengtai District, the entire administrative zones in Majuqiao of the Tongzhou District, the Haidian District, the Shijingshan District, the Shunyi District. The requirements promulgated by the State Council this time actually represent a further response to the Official Reply of the State Council on Deepening the Reform and Promoting the Comprehensive Pilot Program of the Further Opening of the Service Industry of Beijing Municipality (Guo Han  No. 86; hereinafter, the “Reply”). According to the above Reply, Beijing has been running a three-year comprehensive pilot program to further open up the service industry since 2015 primarily as part of the strategy to the coordinated development of Beijing, Tianjin and Hebei and the new open economic system constructed by the state, while gaining experience for an open service industry in China so that they can be promoted and replicated in other regions. Therefore, the Decision also pointed out that after the term of the comprehensive pilot program of opening up of the service industry in Beijing expires, the State Council will adjust the contents of this Decision based on the actual implementations. For investors aspiring to enter the service industry market in China, these requirements and all subsequent developments are worthy of attention.