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According to the Provisional Regulations on the Guidance of Foreign Investment and the Guiding Catalogue of Industries for Foreign Investment promulgated by the State Council, together with the actual needs for development, Yunnan Province especially encourages foreign investment in the following sectors:

A. Infrastructure

1. Construction and operation of local railways and connecting bridges and tunnels (solely foreign-funded is not allowed).

2. Construction and operation of highways, independent bridges and tunnels, and port facilities (in public ports, government capital must hold a dominant share);

3. Construction and operation of civil aviation airports (the Chinese part must have a majority share or take a dominant position).

4. Construction and operation of hydropower stations.

5. Construction and operation of thermal power stations with a capacity of 300,000 kw or over for each generating unit.

B. Development of agricultural and biological resources

1. Tissue culturing, cultivation, preservation and processing of particular flowers and plants species.

2. Cultivation and processing of tropical cash crops.

3. Introduction of improved varieties of commercially valuable plants and fruit trees from tropical, subtropical and temperate zones. Establishing nursery, plantation, processing and developing technology for transporting perishable produce.

4. Cultivation and processing of natural perfumes.

5. Cultivation and processing of edible mushrooms.

6. Development of animal by-products (breeding, raising, slaughtering and processing of meat animals; processing of dairy products; processing of animal offal and blood products for use in pharmaceuticals; leather and fur production.)

7. Development of selected commercially valuable crops and their application (functional enzymes, functional proteins, pharmaceuticals from medicinal herbs, comprehensive development of castor and palm products).

C. Development of mineral resources

1. High-density phosphorous compound fertilizers, food and feed additives, fire retardant, phosphate and phosphoric chemicals.

2. Iron and steel industry.

(1) mining and dressing of iron ores;

(2) mining, dressing, smelting and intensive processing of manganese ores;

(3) smelting of stainless steel;

(4) cold-rolled silicon steel sheets, galvanized sheets and tin-plated sheets, cold-rolled sheets and hot-rolled sheets;

(5) production of iron by direct reduction and molten reduction methods.

3. Non-ferrous metal industry.

(1) mono-crystalline silicon and polycrystalline silicon;

(2) hard alloys, tin compounds, antimony compounds;

(3) nonferrous composites, new alloys;

(4) mining of copper, lead and zinc ores (solely foreign-funded is not allowed);

(5) mining of aluminum ore (solely foreign-funded is not allowed), production of over 300,000 tons of aluminum annually.

4. Risk exploration for mineral resources.

5. Manufacture of building materials and nonmetal products.

(1) new types of building materials;

(2) technology for intensive plate glass processing;

(3) inorganic nonmetallic materials and related products (quartz glass, artificial crystal);

(4) mining and processing of natural stone outside the government protected areas;

(5) production of cement by the dry revolving kiln process (over 4000 tons daily).

D. Development of tourism resources

1. Development of national and provincial tourist destinations and scenic spots, including the construction of related facilities.

2. Construction of recreational facilities in vacation zones.

E. Hi-technology industry

1. Expansion and industrialization of high technology.

2. Upgrading of traditional industries using high technology focusing on electronics and machinery, biological pharmacy, food processing, metallurgical and chemical industries. Main items involved include: digitally controlled machine tools for export, electrical products, electronic devices for banding and commerce systems, electronic components. Upgrading of processing in sugar refineries and sugar produces, paper products, optical products, tire and rubber products, improved building materials, glassware, down stream timber processing.

F. Environmental protection

1. Recycling industrial waste such as gases, water processing residues.

2. Manufacturing of equipment to improve urban sanitation.

3. Improvement of the ecological environment and any related construction projects.

4. Engineering and technology for pollution treatment and the introduction of pollution control measures.

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