Leveling the Playing Field
China’s new negative list for investors will make starting a business easier
On December 25, 2018, when many parts of the world were celebrating Christmas, foreign investors eyeing China and Chinese enterprises also received a long-term gift.
China’s National Development and Reform Commission (NDRC) and Ministry of Commerce (MOFCOM) released a nationwide negative list, detailing the industries prohibited or restricted for investment from both foreign and domestic investors. Industries not on the list are open for investment to all market players, creating a level playing field for all in terms of entry rules.
There are 151 sectors on the list. Four of these are prohibited for investment, including illegal financing and unlawful Internet activities. The rest, such as agriculture, manufacturing, mining and ride-hailing business, needs government approval. The list also includes 581 specific rules.
This is a shorter list following a trial run that started in 2016. The new list has removed restrictions on more sectors, slashing 177 sectors and 288 rules.
“The implementation of the nationwide negative list shows that China has developed a unified, fair and rule-based system for market access,” Xu Shanchang, Director General of the Economic System Reform Department of the NDRC, said at a press conference held on December 25, 2018. “As it takes effect, local governmental agencies will be barred from making rules about market entry.”
Xu stressed that inappropriate or dis-