MoARA To Facilitate Foreign Seed Company China Market Entry

MoARA now welcomes broader entry of foreign seed companies to China’s markets and promised to offer plant variety protection by using EDV (essentially derived varieties) management and DNA fingerprinting. Niche sectors such as sunflower, sugar beet and rapeseed still offer high investment potential.

MoARA To Facilitate Foreign Seed Company China Market Entry Recently, MoARA officials answered questions on the latest “Special Measures (Negative List) for the Access of Foreign Investment (2018)”, which dramatically loosened market entry restrictions on overseas seed companies. MoARA described the simplification of administrative procedures associated with production and marketing approvals and also the reinforcement of intellectual property protection on patent varieties.

In June 2018, NDRC and MOFCOM jointly issued the “Special Measures (Negative List) for the Access of Foreign Investment (2018)” and the “Special Measures (Negative List) for the Access of Foreign Investment in Pilot Free Trade Zones (2018)”. Compared to the previous lists, foreign seed companies are allowed to breed or produce new crop varieties or engage in seed production (except for wheat and maize) either through WFOEs (wholly foreign-owned enterprise) or EJVs (equity joint venture). EJV engaged in breeding and seed production of wheat and maize crops should be controlled by Chinese parties and the minimum percentage of Chinese investors should be greater than 34% in pilot free trade zones and 51% in other regions. But foreign-funded companies are forbidden in sensitive sectors involving:

  • The development or culturing of rare China native crop species, livestock and aquatic varieties, as well as the production of their breeding materials
  • Breeding and production of genetically modified crop seeds, animal and aquatic breeds

China had not imposed any restriction on foreign seed companies until 1997, when 4 Ministries/Commissions jointly issued the “Rules on the Approval and Registration of Foreign-funded Crop Seed Companies”, which ruled that foreign-funded companies engaged in activities associated with cereals, cotton and oil crop seed production should be joint venture and controlled by Chinese parties. Whereas the R&D of new crop varieties were still allowed by WFOEs. In 2007, China revised the “Catalogue of Industries for Guiding Foreign Investment”, requiring that foreign-fund companies engaged in R&D and seed production of all crops should be joint venture and controlled by Chinese parties.

The previous restrictions on foreign investment was for food security consideration rather than protecting the domestic industry. It is unlikely that China’s seed market will be flooded by foreign-funded companies after the opening up:

  • The restriction on 2 staple crops: wheat and maize remained unchanged while domestic companies have overwhelming superiority in rice seed. It was also difficult for foreign companies to make a difference in other major crops. Soybean and cotton market have already dominated by conventional breeding and GM seeds while vegetable market has been saturated with overseas companies (established prior 2007). It is likely that opportunities still exist in niche sectors such as sunflower, sugar beet and rapeseed, etc;
  • The establishing of foreign-funded seed companies still needs to be approved and based on a subjective criterion: “it benefits the sound development of China’s seed industry”, which explains the small numbers of foreign-funded seed companies approved over the past 20 years;
  • Foreign-funded companies are not allowed to breed or produce GM seeds;

In the latest institutional reconstructing, MoARA formed the “Department of Seed Industry Management” and livestock and aquatic breeds will be newly included to the scope of the official duty. The deputy director Ms. Wu recently introduced some measures to be adopted in the near future, which would help  intellectual property protection on crop varieties:

  • Accelerating the amendment to the “Measures for the Management of Agricultural Germplasm Resources”
  • To collect more data during the 3rd national census on agricultural germplasm resources
  • EDV (essentially derived varieties) management will be firstly piloted on rice and other representative crops
  • Elevated criteria for DNA identification and DUS (Distinctness, Uniformity and Stability) tests and wider DNA fingerprinting application during variety protection, cultivar appraisal and registration
  • Post-approval review on defective varieties;

 

Something Wrong? At Chemlinked we do our utmost to provide you with accurate information. However sometimes errors slip under the radar, we’re only human. That’s where you our vigilant reader come in! If you notice any errors contact us on: error@chemlinked.com Budding Journalist ? Send us your news on: news@chemlinked.com