Many technologically undeveloped industries are added to the limited-to-joint-ventures category in the new Catalogue, such as mining, additives for natural food etc.

From this angle, we can see the document is encouraging joint ventures by market regulation based on fairness. We have gone through an opening-up process after joining WTO that left China standing at an even higher status in the trade arena. This is the direction of China's development. Joint ventures in the past were like forced marriages in ancient China, but now things are different. Companies make their own decisions on who should be their partners, just like women have the right to choose the right men.

The EO: Why are foreign investment forbidden or limited in projects of golf fields, villas and top-grade hotels? Foreign investment in real estate grew at a 60 percent rate in the first nine months of the year. How will the Catalogue affect the real estate market?

Zhang: China is confronted with triple pressure from the yuan's appreciation, land administration, and environmental resources. Limitation to foreign investment doesn't give domestic investors the access to these projects.
Foreign capital plays a significant role in China's real estate market. The key influence comes from its performance. Most foreign capital is legal, but there remain speculation. Apart from the foreign capital itself, the government's attitude also counts. Local governments are basically positive about foreign investment, as it helps with GDP growth as well as financial revenues and employment.

The new document also forbids and limits mining because mines are rare and precious. It's necessary to adopt strict regulations on foreign investment in this industry since related systems are not fully developed yet.

The EO: This is the first revision of the Catalogue since 2004. What's your comment on its rate of progress?

Zhang: Reform in China is progressing step by step. The same is true of the Catalogue. We have to lay aside some of the problems which can not be solved today. The Catalogue is a clear reflection of the scientific outlook on development in terms of its devotion to independent innovation, energy reservation, surplus control, and shepherding businesses in the processing industries.