In 1978, China set out to gain a stronger foothold in the global economy by reshaping its economic policies toward a more open investment climate. Over the four decades since theirintroduction, China’s reform and opening-up policies have transformedthe nation into a global powerhouse.

Today, the country is the world’s second-largest economy, largest manufacturing nation and a major force in the global resource industry. With a population of 1.3 billion people and an extensive industrialization and infrastructure development program, China leads the world in the consumption of metals and minerals. Around 40 percent of resources mined around the world eventually end up in China.

The adoption of the initial Mineral Resources Law in 1986 and the opening of the market to private investors have bothled to the modernization of China’s domestic mining industry over the last 30years. China is now a major producer of more than 20 of the world’s most important resource commodities, including coal, gold and most rare earths. China’s mineral reserves are diverse and extensive, consisting of the largest portion of global reserves for molybdenum, titanium, tungsten and rare earths.

In November 2015, the government of China released its 13th five-year plan (2016-2020) for the economy, which underscores a transition from a manufacturing-based economy to a service-based economy. In its annual review on global trends in the mining industry, PwC reports that although this transition will decrease China’s demand for raw commodities, China will continue to be a major player in the global mining industry.

Mr. Yikang Liu, a former deputy general secretary of the China Mining Association and former vice-chairman of the Geological Society of China, has confirmed that sentiment. He told the Investing News Network that although China is completing the industrialization phase of its economic build out, mining will continue to play a critical role in the nation’s economy.

The total consumption for minerals will still be very large. Many minerals, such as iron ore, will soon cross the highest consumption point. In China’s economy, the important status of mining will not change, said Mr. Liu, who was the chief geologist for the former Ministry of Metallurgical Industry of China, where he made significant contributions to China’s most current (1997) Mineral Resources Law.

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Foreign investment welcome in China’s mining sector

Since the launch of the reform and opening-up economic policies in 1978, China has attracted more than $1.7 trillion in foreign investment. The Asia Pacific Foundation of Canada says that China has become one of the top three destinations for foreign investment since 2008, with a total inward foreign investment of US$126 [billion] in 2016.

China first allowed foreign investment in resource exploration and mining in 1993. The revised Mineral Resources Law in 1997 further enabled foreign companies to establish joint ventures with Chinese companies that hold exploration licenses. One huge plus for foreign miners is China’s transparent, straightforward permitting process. Sino-foreign joint venture companies can secure exploration permits following the completion of necessary geological reports. Reserve calculations are completed by a certified Chinese mining engineering firm prior to the issuance of mining permits.

China ranks as the top mining jurisdiction for the whole of Asia, according to the Fraser Institute 2016 Mining Survey of the most attractive mining jurisdiction in the world. China’s taxation regime on mining projects compares favorably with some of the world’s top jurisdictions. Companies pay a 3-percent resource tax to the government as a royalty, along with a 25-percent income tax and a 17-percent value-added tax on sales of concentrates. Ranking 54th out of a total of 104 mining jurisdictions in the 2016 survey, China obviously has some room for improvement on the global stage, but its increasingly open economic reforms are paving the way forward.

China recognizes the importance of foreign investment to reaching its economic goals, and has been working over the past decade to redevelop its mining legislation to attract foreign companies.

China’s new open-door policy

China will keep its door wide open and not close it– President Xi Jinpig

In 2017, China has made further policy moves toward opening the country to foreign investment in a number of sectors, including mining. Speaking at the World Economic Forum in Davos in January, Chinese President Xi Jinpig said that the government will expand market access for foreign investors strengthen protection of property rights, and level the playing field to make China’s market more transparent and better regulated. Over the next five years, he said,China expects to bring in $600 billion in foreign investment.

The same day that President Jinpig gave his speech, Chinese Premier Li Keqiang signed a notice issued from China’s State Council entitled, Circular Concerning Measures on Further Opening up and Actively Utilizing Foreign Investment. The notice spells out the new measures China will take to further open up its economy, improve the business climate in the country and encourage foreign investment.

One of the measures outlined by the State Council, revising the Catalogue for the Guidance of Industries for Foreign Investment, was completed in July 2017. The newly updated documentcut the number of restrictions on foreign investment from 93 to 62, further opening access to China’s services, manufacturing and mining sectors.

Specific changes for the mining sector include relaxing restrictions on Foreign Direct Investment in the development of non-conventional oil and gas resources; the exploration and mining of