Longitudinal and Parallel Comparisons of the Negative Lists for Foreign Investment

On the last day of June in 2019, the National Development and Reform Commission and the Ministry of Commerce jointly promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (Edition 2019) (“National List”) and the Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (2019 Version) (“FTZ List”) simultaneously, both of which will be implemented starting from July 30, 2019.  It is worth mentioning that the length of both lists has been further cut down based on their 2018 editions, with the items under the National List being reduced from 48 to 40 and the items under the FTZ List being reduced from 45 to 37. 

In addition, the encouraged industry list under the Catalogue of Industries for Guiding Foreign Investment (Revision 2017) and the Catalogue of Priority Industries for Foreign Investment in Central and Western China (Revision 2017) have been replaced by the Catalogue of Encouraged Industries for Foreign Investment (Edition 2019).  Compared with the two simplified negative lists, the encouraged industry catalogue of 2019 has increased items to encourage foreign investment in almost all industries.

In order to assist foreign investors and those who are interested in cross border investment to get a clearer picture of the differences between Edition 2019 of the two lists and their Edition 2018, we have made two longitudinal comparisons.  Meanwhile, to further assist foreign investors to understand the differences between foreign investment access in and out of the free trade zones, we have also made a comparison between the National List and the FTZ List which aims to enable producers or traders to choose suitable registration places depending on their business needs. 

1. Longitudinal Comparison of the National Lists 

Compared with the National List Edition 2018, the Edition 2019 has repealed all foreign investment access restrictions in seven sub-sectors of five industries, including mining, manufacturing, transportation, warehousing and postal services, water, environment and public facilities management, culture, sports and entertainment with details set forth below: 

Industry

2018

2019

Mining

The
 exploration and development of oil and natural gas (excluding coalbed
 methane, oil shale, oil sands, shale gas, etc.) are limited to joint ventures
 and cooperation.

Repealed

It
 is prohibited to invest in exploration and mining of molybdenum, tin,
 antimony, and fluorite.

Repealed

Manufacturing

It
 is prohibited to invest in the production of Xuan paper and ink sticks.

Repealed

Transportation,
 warehousing and postal services

Domestic
 shipping agencies must be controlled by the Chinese side.

Repealed

Water,
 environment and public facilities management

It
 is prohibited to invest in the development of wild animal and plant resources
 protected by the country that are originating in China

Repealed

Culture,
 sports and entertainment

The
 construction and operation of the cinema must be controlled by the Chinese
 side.

Repealed

Performance
 brokers must be controlled by the Chinese side.

Repealed

 

2. Longitudinal Comparison of the FTZ Lists

 Compared with FTZ List Edition 2018, the Edition 2019 has repealed any and all foreign investment access restrictions in 7 sub-sectors of six industries including agriculture, forestry, husbandry and fishery, mining, manufacturing, transportation, warehousing and postal services, water, environment and public facilities management, culture, sports and entertainment with details set forth below:

Industry

2018

2019

Agriculture,
 forestry, husbandry and fishery

Investment
 in aquatic product fishing in China and within China territorial waters shall
 be prohibited.

Repealed

Mining

Investment
 in exploration and mining of molybdenum, tin, antimony and fluorite shall be
 prohibited.

Repealed

Manufacturing

The
 Chinese party of printers of publications shall hold the controlling stake.

Repealed

Investment
 in manufacturing of Xuan paper and ink ingot shall be prohibited.

Repealed

Transportation,
 warehousing and postal services

The
 controlling stake of domestic shipping agencies shall be held by the Chinese
 party.

Repealed

Water,
 environment and public facilities management

Investment
 in development of State-protected wild animal and plant resources originated in
 China shall be prohibited.

Repealed

Culture,
 sports and entertainment

The
 controlling stake for construction and operation of movie theatres shall be
 held by the Chinese party. (Screening of movies shall comply with the time
 ratio for domestic films and imported films stipulated by the Chinese
 Government. The time for screening of domestic films annually of a movie
 theatre shall not be less than two-thirds of the total time for screening of
 movies annually of the movie theatre.)

Repealed

 

3. Parallel Comparison of the National List and the FTZ
List

 As mentioned above, compared with Edition 2018, both the National List and the FTZ List have been “simplified greatly”.  However, except for those two sub-sectors of the agriculture, forestry, husbandry and fishery, and manufacturing industries for which the foreign investment access restrictions (on development of State-protected wild animal and plant resources originated in China and printing of publications) have been repealed under the two Edition 2019 lists, the differences between the two Edition 2019 lists are almost the same as those between the two Edition 2018 lists.

Industry

National
  List

FTZ
  List

New
  Difference

I. Agriculture,
 forestry, animal husbandry and fishery

The
 selection and breeding of new varieties of wheat and corn, and seed
 production must be controlled by the Chinese side.

Chinese
 party shareholding in new variety breeding and seed production of wheat and
 maize shall not be less than 34%.

No

It
 is prohibited to invest in the fishing of aquatic products in sea and inland
 waters under China’s jurisdiction.

Repealed

Yes

II.
 Mining

It
 is prohibited to invest in exploration, mining and beneficiation of rare
 earth,
radioactive minerals, and tungsten.

It
 is prohibited to invest in exploration, mining and beneficiation of rare
 earth, radioactive minerals, and tungsten.
(Without permission, no person shall
 be allowed to enter rare earth mines or obtain mine geology information, ore
 samples and production technology.)

No

III.
 Manufacturing

The
 printing of publications must be controlled by the Chinese side.

Repealed

Yes

It
 is prohibited to invest in the smelting and processing of radioactive
 minerals, or production of nuclear fuel.

No restriction

No

VI. Transportation,
 warehousing and postal services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic
 water transportation companies must be controlled by the Chinese side.

Domestic
 water transportation companies must be controlled by the Chinese side. (Foreign investors shall not
 operate, or operate through disguised lease of Chinese vessels or berths
 etc., China domestic waterway transport business and auxiliary businesses
 thereof; water transport business operators shall not use foreign vessel(s)
 to operate domestic water transport business however if upon approval by the
 Chinese government where there is no Chinese vessel in China which can
 satisfy the transportation requirements, and the port or waters where the
 vessel is docked is opened to foreign vessels, the water transport business
 operator may use foreign vessel(s) temporarily within the term or voyage
 stipulated by the Chinese Government to undertake marine transport and towing
 between Chinese ports.)

No

The
 public air transport company must be controlled by the Chinese side, and the
 investment ratio of a foreign company and its affiliates must not exceed 25%.
 The legal representative must be a citizen of Chinese nationality.

The
 controlling stake in public aviation enterprises shall be held by the Chinese
 party, and the investment ratio of a foreign investor and its associates shall
 not exceed 25%. The legal representative shall be a Chinese citizen. (Only China designated public
 aviation enterprises can operate domestic aviation business, and provide
 regular and ad hoc international aviation services in the capacity of a China
 designated carrier.)

No

It
 is prohibited to invest in postal companies and domestic express delivery
 services.

Investment
 in postal enterprises (and
 operation of postal services)
and domestic express mail business shall
 be prohibited.

No

VII.
 Information transmission, software and information technology services

Telecommunications
 companies: the telecommunication services are limited to those promised at
 China’s WTO accession, and foreign-invested shares of value-added
 telecommunications services must not exceed 50% (excluding e-commerce,
 domestic multi-party communication,store-and-forward business, call center);
 the basic telecommunications services must be controlled by the Chinese side.

Telecommunications
 companies: limited to telecommunications services opened up pursuant to
 China’s WTO commitments; the foreign investment ratio for value-add
 telecommunications services (except for e-commerce, , domestic multi-party
 communication,store-and-forward business, call center) shall not exceed 50%;
 the controlling stake of operators of basic telecommunications businesses
 shall be held by the Chinese party (and the operators shall be telecommunications companies established
 pursuant to the law to engage specifically in basic telecommunications
 businesses). The pilot scheme policies of the Shanghai Pilot Free Trade
 Zone’s original territory (28.8 square kilometers) shall be extended to all
 pilot FTZs.

No

XI.
 Education

 

 

 

 

 

 

 

 

 

 

Preschool,
 ordinary high school and higher education institutions are limited to
 Sino-foreign cooperative education, and must be led by the Chinese side (The
 principal or chief administrative officer shall have Chinese nationality, and
 Chinese members of the council, board of directors or joint management
 committee shall be no less than than 1/2).

Pre-school,
 ordinary high school and higher education institutions shall be limited to
 the form of Sino-foreign cooperative joint venture and led by the Chinese
 party (the principal or the key person-in-charge of administration shall be a
 Chinese national (and based in China); Chinese members shall comprise no less
 than half of the council, board of directors or joint administrative
 committee. (Foreign
 education institutions, other organizations or individuals shall not solely
 establish schools or any other educational institutions whose enrolment
 targets are mainly Chinese citizens (excluding non-academic vocational skills
 training), however, foreign educational institutions may cooperate with a
 Chinese educational institution to jointly establish educational institutions
 whose enrolment targets are mainly Chinese citizens).

No

XIII.
 Culture, sports and entertainment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment
 in news institutions (including but not limited to news agencies) is
 prohibited.

Investment
 in establishment of news organizations (including but not limited to news
 agencies) shall be prohibited. (Establishment of resident news agency in China and assignment of
 permanent correspondents to China by foreign news organizations shall be
 subject to approval by the Chinese Government. Provision of news services by
 foreign news agencies in China shall be subject to examination and approval
 by the Chinese Government. Business cooperation between Chinese and foreign
 new organizations shall be led by the Chinese party, and shall be subject to
 approval by the Chinese Government.)

No

It
 is prohibited to invest in the editing, publishing and production of books,
 newspapers, periodicals, audio-visual products and electronic publications.

Investment
 and operation of editing, publication and production of books, newspapers,
 periodicals, audio-visual products and electronic publications shall be
 prohibited. (However,
 subject to approval by the Chinese Government, provided that the Chinese
 cooperative party holds the operating dominance rights and the rights to
 final examination of contents, and that the parties satisfy other criteria
 such as compliance with approval reply of the Chinese Government, a
 Sino-foreign publisher may engage in Sino-foreign cooperative news publishing
 projects. Without approval by the Chinese Government, provision of financial
 information in China shall be prohibited.)

No

It
 is prohibited to invest in broadcasting stations, television stations, radio
 and television channels (frequencies), radio and television transmission
 coverage networks (transmission stations, relay stations, radio and
 television satellites, satellite uplink stations, satellite retransmission
 stations, microwave stations, monitoring stations and cable radio and
 television transmission coverage networks, etc.) at all levels. It is
 prohibited to engage in installation services for on demand services for
 broadcast television videos and ground reception facilities for satellite
 television broadcasting.

Investment
 in establishment and operation of all levels of radio stations, television
 stations, radio and television channel (frequency), radio and television
 transmission coverage networks (including transmitters and relay stations,
 radio and television satellites, satellite up-stations, satellite
 transmission stations, microwave stations, monitoring stations, cable radio
 and television transmission coverage networks etc.) shall be prohibited, and
 engaging in radio and television video on demand services and satellite
 television ground receiving facilities installation services shall be
 prohibited. (Landing of
 overseas satellite channels shall be subject to examination and approval.)

No

It
 is prohibited to invest in the production and operation of broadcasting and
 television programs (including the introduction of businesses).

Investment
 in radio and television program production and operation (including
 introduction of business) enterprises shall be prohibited. (Introduction of overseas
 television programs and introduction of other overseas television programs
 via satellite transmission shall be declared by units designated by the State
 Administration of Press, Publication, Radio, Film and Television.
 Sino-foreign cooperative production of television series (including
 television animation) shall be subject to licensing.)

No

It
 is prohibited to invest in film production companies, distribution companies,
 cinema companies, and film import business.

Investment
 in film production companies, distribution companies and cinema companies as
 well as film introduction business shall be prohibited. (However, upon approval,
 foreign enterprises are allowed to produce films with Chinese enterprises.)

No

It
 is prohibited to invest in the auction companies for cultural relics, stores
 for cultural relics, and state-owned cultural relics museums.

Investment
 in auction companies, cultural relics stores and state-owned cultural relics
 museums engaging in auction of cultural relics shall be prohibited. (Transfer, mortgage and
 renting of immovable cultural relics and cultural relics prohibited to be
 brought out of China to foreigners shall be prohibited. Establishment and
 operation of intangible cultural heritage investigation organizations shall
 be prohibited; intangible cultural heritage surveys and archaeological
 investigation, exploration and excavation in China by overseas organizations
 or individuals shall adopt the form of cooperation with China and be subject
 to special examination and approval and licensing.)

No

It
 is prohibited to invest in performing arts groups.

The
 controlling stake of performing arts groups shall be held by Chinese party.

No

 

最后编辑于:2020-11-29 15:46
  • 本站声明:本站所载之法律论文、法律评论、案例、法律咨询等,除非另有注明,著作权人均为站长杨春宝高级律师本人。欢迎其他网站链接,但是,未经书面许可,不得擅自摘编、转载。引用及经许可转载时均应注明作者和出处"法律桥",并链接本站。本站网址:http://www.LawBridge.org。
  •  
  •         本站所有内容(包括法律咨询、法律法规)仅供参考,不构成法律意见,本站不对资料的完整性和时效性负责。您在处理具体法律事务时,请洽询有资质的律师。本站将努力为广大网友提供更好的服务,但不对本站提供的任何免费服务作出正式的承诺。本站所载投稿文章,其言论不代表本站观点,如需使用,请与原作者联系,版权归原作者所有。

发表回复