China will remove the joint venture requirement for foreign companies wanting to enter its oil and gas industry as it moves to open up a range of industries as per a pledge it made during its continuing trade dispute with the United States.
Bloomberg reports the Chinese National Development and Reform Commission had announced it would remove the joint venture requirement for oil and gas projects along with a rule stating that only local firms can control gas networks in cities with populations of over half a million people.
This opens up a lot of opportunities for foreign companies who are eager to stake a claim in China’s fast-growing gas market as the country switches from oil and coal to gas for electricity to reduce pollution. Interest in oil and gas exploration might be a little more muted given the challenges inherent in new exploration, but it will probably still be there.
The NPRC announcement, Bloomberg noted, came on the heels of news that Presidents Xi and Trump had agreed to what effectively amounts to a truce in their trade war with pledges to renew the negotiations that broke down last month.
China agreed to ease restrictions for foreign ownership in car manufacturing companies, insurers, and banks while President Trump said he would delay the imposition of restrictions on Huawei.
According to the NPRC announcement, the new rules will enter into effect at the end of July along with any other restrictions that are absent in the so-called negative list of rules restricting foreign companies’ access to certain industries such as oil and gas and mining. To drive the goodwill point home, the NPRC said “China is sticking to the opening-up policy and continuing to ease market access, despite the fact that globalization is currently hampered by unilateralism and protectionism, and cross-border investment is affected by trade frictions.”