New modification on PRC Negative list in the Catalogue of Industries for Guiding Foreign Investment

On June 30, 2019, the National Development and Reform Commission (“NDRC”) and the Ministry of Commerce (“MOFCOM”) jointly issued two “Negative Lists” and one “Encouraged Catalogue”, all of which have taken into effect on first mentioned date.

The two new Negative Lists have replaced the 2018 versions which are the Special Administrative Measures on Access to Foreign Investment (2019 edition) (“2019 FI National Negative List”) and the Free Trade Zone Special Administrative Measures on Access to Foreign Investment (2019 edition) (“2019 FI FTZ Negative list”). The new modifications further streamlined the negative list. The number of negative entry lists for foreign investment in China was reduced from 48 measures to 40, and the number of negative entry list for foreign investment in the Pilot Free Trade Zone was reduced from 45 to 37. The new legislation (in Chinese) can be found on the http://www.ndrc.gov.cn

Specifically, the main changes are concentrated in the following three aspects:

Service Industry

In the transportation sector, the restriction that a Chinese party had to be the major shareholder of domestic shipping agents was abolished. Similar in infrastructure, the restriction that a Chinese party must be the major shareholder of urban gas and heat pipe networks of the city with over 500,000 citizens was abolished. In the cultural field, there is no restriction that a Chinese party must be the major shareholder of cinemas and performance brokerage institutions any longer, and in the field of value-added telecommunications, the restrictions on foreign investment in domestic multi-party communication, store-and-forward, and call center services were eliminated as well.

Agriculture, Mining and Manufacturing Industry

In the agricultural sector, regulations prohibiting foreign investment in wildlife resources development were abolished. In the mining industry, exploration and development of oil and gas were not limited to joint ventures and cooperation, and the regulations forbidding foreign investment in exploring and mining molybdenum, tin, antimony and fluorite were abolished. In the manufacturing sector, the ban on foreign investment in rice paper and ink ingot production was lifted.

Pilot Free Trade Zone

The revision of the 2019 version of the free entry list of foreign investment in the Pilot Free Trade Zone has eliminated restrictions on foreign investment in certain areas such as fishery and printing.

Finally, these new modifications will further deregulate and encourage foreign investment in various fields such as service industry, manufacturing industry, agriculture, energy, etc. These measures not only reflect the inherent needs of China’s economy to achieve high-quality development, but also reflect China’s further opening up to foreign investment.

Our China desk has always been focusing on helping foreign investors expanding their business in China.

 

All articles have been prepared for general information purposes only to permit you to learn more about our firm, our services and the experience of our attorneys. The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice.

 

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