On June 30th 2019, the National Development and Reform Commission and the Ministry of Commerce issued the Special Management Measures for Foreign Investment Access, also known as the “Negative List 2019 Edition”. With the number of entries reduced from forty-eight to forty, the list will come into effect on July 30th 2019.
The negative list controls which industries can be invested in by foreign companies.Foreign investment outside the negative list shall be managed in accordance with the principle of consistency of domestic and foreign investment.
The 2019 edition of the negative list introduces new opening measures in a range of areas:
1. The service industry
In the field of transportation, the restriction that domestic shipping agents must be controlled by the Chinese side shall be lifted.
In the area of infrastructure, the restriction that the gas and thermal pipe networks in cities with a population of more than half a million must be controlled by the Chinese side shall be lifted.
In the field of culture, the restriction that cinemas and performance agencies must be controlled by the Chinese side shall be lifted.
In the field of value-added telecommunications, the restrictions on foreign investment in domestic multi-party communications, storage and forwarding, and call centers have been removed.
2. The agriculture, mining and manufacturing industries
In the field of agriculture, the prohibition on foreign investment in the development of wildlife resources shall be lifted.
In the mining sector, the restrictions on oil and gas exploration and development restricted to joint ventures and cooperation shall be lifted, and the prohibition of foreign investment in tantalum, tin, palladium and fluorite exploration and usage shall be lifted as well.
In the manufacturing sector, the prohibition on foreign investment in the production of paper and ingots shall be lifted.
Generally speaking, this revision of the negative list allows foreign ownership or sole proprietorship in more areas. At the same time, Free Trade Areas will continue to play the role of a testing area for foreign investment.
On the basis of the national opening measures, the negative list in the 2019 edition of the Free Trade Area has removed restrictions on foreign investment in the fields of aquaculture, fishing and publication printing, and continues to expand the “opening-up test”.
In the future, it appears that more and more industries will be open to foreign investment in China.