Foreign investors will be given more access to China’s service, manufacturing and agricultural sectors since 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.
China’s economic planner on Wednesday published the 2020 negative list for foreign investment, reducing the number of items on the list to 33 from 40 the previous year. China has shortened the lists for four consecutive years.
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.
Negative lists indicate areas where investment is prohibited or restricted, and all other areas are presumed to be open. As the new lists get further shortened, foreign investors will be given more freedom in more sectors.
The new lists will take effect on July 23.
According to a joint statement issued by the Ministry of Commerce (MOC) and the National Development and Reform Commission (NDRC), there’re three main changes in the new version of the negative lists:
Further open key areas in the service sector;
Improve the level of openness in the manufacturing and agricultural sectors;
Continue to carry out the pilot in free trade zones (FTZs).
In the financial sector, foreign ownership caps on brokerage firms, futures companies and life insurance companies would be removed, allowing for total ownership of such businesses by foreign entities.
The restriction stipulating that China controls the building and operation of water supply and drainage pipelines in cities with a population of more than 500,000 people will also be lifted. In the field of transportation, the regulations prohibiting foreign investment in air traffic control will also be canceled.
In the manufacturing sector, foreign ownership caps on commercial vehicle manufacturing will be lifted, and regulations prohibiting foreign investment in the smelting and processing of radioactive minerals and nuclear fuel production will also be eliminated.
Also, in the agricultural sector, ownership by foreign investors in wheat breeding, seed production would be raised to 66 percent.
The role of FTZs as a pioneer of the country’s reform and opening-up will be further strengthened. In the field of medicine, the regulations prohibiting foreign investment in prepared slices of traditional Chinese medicine were canceled. Meanwhile, foreign investors will be allowed to run wholly-owned vocational education institutions.
The new list is expected to improve the business environment in China, draw more multinational companies from all over the world to invest in the country more efficiently, promote the gradual stabilization of global trade and investment, thus helping offset the negative impacts of the epidemic and enhancing economic vitality.
If you want to know the full content of the announcement and the lists, please check the MOC’s official website (in Chinese):
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SOURCE | Caixin / CGTN / China Daily