China releases new negative lists for foreign investment

China has 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 number of sectors that are off-limits for foreign investors will be cut to 33 in the 2020 version of the negative list from 40 in the 2019 version, according to a statement jointly released on June 23 by the National Development and Reform Commission and the Ministry of Commerce.

China also unveiled its 2020 negative list for foreign investment in pilot free trade zones, cutting the number of prohibited industries to 30 from 37.

The two new negative lists will take effect on July 23.

According to the new lists, foreign ownership caps on securities, fund management, futures, life insurance companies, as well as commercial vehicle enterprises will be removed. Ownership by foreign investors in wheat breeding and seed production can be raised to up to 66 percent.

Foreign investors will be allowed to invest in sectors including prepared slices of traditional Chinese medicine, the smelting and processing of radioactive minerals, and the production of nuclear fuel.

In the area of infrastructure industry, 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.

In education, wholly foreign-owned institutions for vocational education will be allowed.