The 2021 National Negative List has removed two restricted items from its 2020 counterpart, cutting it 33 to 31, while the new 2021 FTZ Negative List removed three items, cutting it down to 27 from 30.
The negative lists also level the playing field for foreign and domestic investors operating in the field of radio and television equipment manufacturing, lifting the restrictions on foreign investment in satellite television broadcasting ground receiving facilities and the production of key components.
In addition, there will be no restrictions on foreign investment in the manufacturing sectors in Pilot Free Trade Zones.
Foreign investors will now also be allowed to invest in the field of social surveys, but the Chinese shareholding ratio can be no less than 67%, and the legal representative must be a Chinese national.
The notes explain that Chinese companies engaged in one of the fields prohibited from receiving foreign investment must undergo a review and approval process by the government before they can list on a stock market overseas.
Foreign investors are also not permitted to participate in the operation and management of these enterprises, and their shareholding ratio must be governed in accordance with the relevant regulations on the management of foreign investment in domestic securities.
China’s securities regulators and relevant authorities will implement precise management of overseas listing and financing of these domestic enterprises.
The notes add that foreign-invested enterprises must comply with the relevant provisions of the Negative Lists for investing in China, in accordance with the Regulations for the Implementation of the Foreign Investment Law.
In order to properly link the Negative Lists and the Negative List for Market Access, the explanatory notes added that “Foreign and domestic investors must uniformly apply the relevant provisions of the Negative List for Market Access”.
FTZ Negative List can be found below.
The new lists also signal a new level of market opening – they will boost foreign investor confidence in China and accelerate structural upgrades to the country’s existing supply chains.
As to the implementation of the two Negative Lists, the NDRC said if the current laws or regulations need to be adjusted, the relevant departments will do so within two years. That is to say, all the new opening measures are expected to be implemented by the end of 2024 at the latest.