China has decided to abolish the terms in a previous circular in 2011 and lift its restrictions on foreign investment companies using domestic loans to carry out equity investment, the Ministry of Commerce (MOC) said on Thursday.

The move aims to implement the Foreign Investment Law and encourage multinational companies to establish headquarters-type institutions in China, MOC spokesperson He Yadong told a press conference.

He said that the scale of reinvestment by foreign-funded enterprises in China has continued to grow in recent years, and some foreign companies have expressed hope for the removal of restrictions on addressing their capital needs of reinvestment through domestic loans.

Foreign-funded enterprises are welcome to report any difficulties or problems they encounter in their investment and operations to Chinese authorities, the spokesperson said.

The MOC will work to coordinate and promote solutions for the reasonable demands of foreign enterprises, and provide a good business environment for foreign enterprises to invest and operate in China, He added.