July 20 2020

China’s 2020 negative list shortened again

Source: State Council of PRC

China unveiled new, shortened negative lists for foreign investment, as part of efforts to further open up the economy and improve its business environment amid the novel coronavirus epidemic. The new negative lists will go into effect on July 23.

Items on the national negative list will be cut from 40 to 33, and the negative list for pilot free trade zones (FTZs) will shrink from 37 to 30.

The shortened nationwide list further improves the level of openness in the service, manufacturing, and agricultural sectors.

In the service sector, foreign ownership caps on securities, fund management, futures and life insurance companies will be removed.

Foreign investors will be allowed to take majority shares in joint ventures that engage in the building and operation of water supply and drainage networks in cities with a population of more than 500,000.

Regulations prohibiting foreign investment in air traffic control also will be canceled.

In the manufacturing sector, foreign ownership caps on commercial vehicle manufacturing will be lifted, and regulations prohibiting foreign investment in the smelting and processing of radioactive minerals and nuclear fuel production also will be eliminated.

In the agricultural sector, ownership limit on foreign investors in wheat breeding and seed production will be raised up to 66 percent.

The role of FTZs as a pioneer in the country's reform and opening-up will be further strengthened. In the field of medicine, regulations prohibiting foreign investment in ready-to-use traditional Chinese medicine will be canceled. Foreign investors will be allowed to run wholly owned vocational education institutions.

From 2017 to 2019, China was the second-largest foreign direct investment (FDI) recipient despite continuing declines in global transnational investment, with FDI inflow of over $141 billion in 2019.


Source: State Council of PRC