China opens more sectors to foreign investment with new negative lists

Updated: July 1, 2019 Source: Xinhua News Agency
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China on Sunday rolled out revised negative lists for foreign investment market access, introducing greater opening-up and allowing foreign investors to run majority-share-controlling or wholly-owned businesses in more sectors.

With the approval of the Communist Party of China Central Committee and the State Council, the National Development and Reform Commission and the Ministry of Commerce released two negative lists of 2019.

The two lists, one for the piloted free trade zones (FTZ) and one for the rest of the country, contain fewer access-limiting measures. Pilot FTZs now have 37 listed items for foreign investors, down from 45, while non-FTZ areas are required to implement 40 items instead of 48.

The negative lists for market access outline sectors, fields and businesses off-limits for investors. Industries, fields and businesses not on the lists are open for investment to all market players. Chinese authorities revise the negative lists for market access on an annual basis. The 2018 versions were released last December.

The service sector will see greater opening-up in transport, infrastructure, culture, and value-added telecommunications.

The restriction that domestic shipping agencies must be controlled by the Chinese side has been scrapped. The restriction that gas and heat pipelines in cities with a population of more than 500,000 shall be controlled by the Chinese side has been lifted. The restriction that cinemas and performance brokerage institutions must be controlled by the Chinese side has been rescinded. The restriction on foreign investment in domestic multi-party communications, store-and-forward and call center services is now canceled.

Market access has been eased in agriculture, mining and manufacturing industries.

Prohibition on foreign investment in the exploitation of wildlife resources has been abolished. Restrictions on the exploration and development of petroleum and natural gas are limited to Chinese-foreign equity joint ventures or non-equity joint ventures have been canceled, as well as the prohibition on foreign investment in the exploration and exploitation of molybdenum, tin, antimony and fluorite.

In the manufacturing sector, the ban on foreign investment in the production of Xuan paper and ink ingots has been lifted.

On the basis of nationwide opening-up measures, the 2019 version of the pilot FTZ negative list for foreign investment has lifted restrictions on foreign investment in areas such as aquatic products fishing and publication printing.

It is expected to give better play to the positive role of foreign investment in China's industrial development, technological progress and structural optimization, said an official with the NDRC.

The number of listed sectors where foreign investment is encouraged see marked rise. Compared with the 2017 version, the new catalogue for encouraging foreign investment nationwide has 67 newly-added items and 45 modified items, while the catalogue of advantageous industries in central, western and northeastern regions has introduced 54 new items.

Over 80 percent of the newly-added or revised items of the nationwide catalogue point to the manufacturing industry. Foreign investment is more encouraged in sectors such as high-end manufacturing, intelligent manufacturing, and green manufacturing.

New items have been added to encourage foreign investment in 5G core components, etching machines for integrated circuits, chip packaging equipment, and cloud computing equipment.

Besides, new entries have been added for artificial intelligence, clean production, carbon capture and circular economy.

The catalogue for the central and western regions further adds labor-intensive as well as advanced and applicable technology industries and supporting facilities, giving the regions greater support to their embracing of industrial transfer of foreign-funded businesses.

China attracted a record high foreign direct investment (FDI) of 138.3 billion U.S. dollars last year, bucking a global trend of FDI slide. In the first five months of this year, the country saw an FDI inflow of 54.6 billion dollars, up 3.7 percent year on year.

Editor: 曹家宁