China shortens negative lists for foreign investment 5th year in a row

China’s new negative lists for foreign investment, taking effect on Jan 1, 2022, will open up the economy and promote high-quality economic development.

Items on the negative lists nationwide and for pilot free trade zones (FTZs) were cut to 31 and 27, down 6.1 percent and 10 percent, respectively. From 2017 to 2020, China cut items on the two negative lists from 93 and 122, to 33 and 30, respectively, introducing major opening-up measures in industries including financing and automobiles.

Foreign ownership caps on passenger car manufacturing companies were removed. 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 on-ground receiving facilities and key components for satellite television and radio broadcasting were lifted, and foreign and domestic investment will be treated equally.

Pilot FTZs opened all manufacturing sectors to foreign investors and are exploring widening access to the service sector.

Restrictions on foreign investors' access to market research in FTZs were lifted, but Chinese investors must be the controlling shareholders of enterprises in the radio and TV ratings survey sector.

Foreign investors in FTZs are also allowed to enter the social research industry, on the premise that shares held by Chinese enterprises are not less than 67 percent, and the legal representatives are Chinese citizens.

In the first 11 months of 2021, China’s actual use of foreign capital reached 1.04 trillion yuan, up 15.9 percent year-on-year, surpassing last year’s totals.