China cuts negative list for 5th consecutive year for foreign companies

The Ministry of Commerce and the National Development and Reform Commission (NDRC) jointly issued two negative lists targeting overseas investment in the country on Monday, further reducing barriers for foreign companies. The lists will take effect on January 1, 2022

The newly released nationwide negative list, and free trade zone negative list for foreign investment are shortened to 31 items and 27 items, respectively, with a reduction ratio of 6.1 percent and 10 percent.

The two lists will deepen the opening-up for the domestic manufacturing industry, marking the negative list of manufacturing items in free trade zones.

For the automobile manufacturing industry, restrictions on foreign ownership in passenger car manufacturing and restrictions on the establishment of two joint ventures in China for the production of the same vehicle products will be lifted.

For radio and television equipment manufacturing, restrictions on foreign investment in the production of ground receiving facilities and key components for satellite television and radio broadcasting will be erased, with the management for foreign investment being the same with domestic enterprises.

Moreover, the restrictions on foreign services companies entering the free trade zones are eased. For marketing research, restrictions on access to foreign investment will be lifted and social research for foreign investment will be allowed. However, the proportion of shares held by Chinese enterprises should not be less than 67 percent, and the legal representative should be a Chinese national.

The accuracy of the negative lists for foreign investment is improved. Domestic enterprises engaged in businesses prohibited by the list should obtain approval from responsible authorities for being listed at overseas capital market.

Moreover, the explanation section for the newly released negative lists detailed the admission for overseas enterprises investing in the Chinese mainland, while further strengthened the connection between the foreign investment negative list and the market access negative list.

Source: Global Times