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on Monday, 01 October 2018
in Business in China

China Boosts Foreign Investment by Cutting Down the Negative List

The Chinese government is offering incrementally greater market access to foreign investors in China by reducing the negative list:

China’s National Development and Reform Commission (NDRC) and Ministry of Commerce (MOFCOM) jointly released the “2018 Special Administrative Measures on Access to Foreign Investment” (外商投资准入特别管理措施(负面清单) and the 2018 version of the “Special Management Measures for the Market Entry of Foreign Investment in Pilot Free Trade Zones”  (自由贸易试验区外商投资准入特别管理措施 (负面清单), which came into effect 28th July 2018.

Until 2017, the Chinese government's policy focused on encouraging overseas investment in particular industries in order to lead the development of technology. However, this past year, amid a series of regulatory reforms, the focus of the Chinese government has shifted to simplifying the regulatory procedures in general for foreign investors.

It is expected that the differences between the national negative list and the free trade zone negative list will be further reduced in the next version, with the aim of adopting a uniform negative list applicable to the whole country in the next few years.

Nationwide negative list

Nationwide negative list reduced from 63 in the previous 2017 version to 48 this year.

Main changes were in the following sectors:

FTZ Negative list

Negative list in FTZ has been cut down from 95 to 45 restrictions.

The new negative list that applies to FTZs, consists of several reductions in foreign access restrictions, mainly in the following sectors:

The announcement of the new list came against the backdrop of sharp criticism directed at China by its leading trading partners, the United States and the European Union, claiming that Chinese companies were free to invest in their markets while foreign companies were limited in their ability to enter the world's second largest economy.

China, for its part, reiterated that it would continue to carry out reforms to open its market and stressed that it would make decisions based on its citizen’s needs rather than external pressures. Foreign investors are encouraged to examine the changes to the foreign investment negative list to determine whether they offer any new business opportunities.

 

sources:

https://www.globalpolicywatch.com/2018/07/china-issues-new-foreign-investment-negative-list-new-market-access-openings/

https://www.calcalist.co.il/world/articles/0,7340,L-3741329,00.html

http://www.nortonrosefulbright.com/knowledge/publications/169122/regulatory-reform-in-china-new-negative-lists-for-foreign-investment-promulgated-and-regulatory-procedures-c#section2

https://www.lexology.com/library/detail.aspx?g=5f3db2d8-3bdb-40e8-a238-de41509373ee

https://www.tmf-group.com/en/news-insights/articles/2018/july/china-new-shortened-negative-list-liberalises-the-industries/

 

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