Negative list cuts signal further market opening
China has cut negative lists for foreign investment to expand high-level opening-up and facilitate high-quality economic development.
A negative list is a special administrative measure related to foreign investors’ access to specific fields of business.
The items restricted to foreign investors have been cut to 31 at the national level, falling 6% from last year, in the newly unveiled negative lists that came into force on Jan 1.
For pilot free trade zones, the items were cut to 27, or by 10%, the National Development and Reform Commission said.
“The constant cutting of the negative lists is a strong signal that China has been stepping up efforts to open wider,” said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.
That will help shore up both Chinese and global economic growth, Zhou said.
The cap on foreign ownership in passenger car manufacturing was abolished, the commission said. Restrictions on a foreign investor establishing more than two joint ventures in China to produce the same vehicle product were also lifted.
Restrictions on foreign investors producing onground receiving facilities and key components for satellite television and radio broadcasting were lifted, and foreign and domestic investment is treated equally.
The new arrangements will boost the allocation of resources in related sectors, and will especially accelerate the development of the free trade zones, Zhou said.
“The wider opening-up in the manufacturing sector will attract more foreign investment, which will spur technological development and innovation in China, and it will help China achieve its national high-quality development agendas such as those on energy preservation, environmental protection, and climate commitments,” Zhou said.
The free trade zone negative list has removed restrictions on foreign investment in the manufacturing sector in such zones, and restrictions have also been reduced in the services sector.
Restrictions on foreign investors’ access to market research in free trade zones were lifted, but Chinese investors must be the controlling shareholders of companies in the radio and TV ratings survey sector.
Foreign investors in free trade zones are also allowed to enter the social research industry, on the premise that shares held by Chinese companies should not be less than 67%, and the legal representatives must be Chinese citizens.
Lu Feng, a professor of economics at the National School of Development, which is part of Peking University, said as China continues opening-up and improves practices to attract foreign investment, foreign investors’ confidence will be bolstered.