Shanghai Municipality, Special Administrative Measures for Foreign Investment Access in the China (Shanghai) Pilot Free Trade Zone (Negative List) (Revised in 2014)

With respect to sectors not on the Negative List, foreign-invested projects shall, according to the principle of administration of domestic and foreign investment on an equal basis, be subject to the record filing system (except for projects where the State Council has specified that the check and approval system be retained for domestically invested projects); and administration of the establishment of and changes to foreign-invested enterprises shall be effected through record filing. With respect to sectors on the Negative List, foreign-invested projects shall be subject to the check and approval system (except for those foreign-invested projects that the State Council has specified are subject to the record filing system); and administration of the establishment of and changes to foreign-invested enterprises shall be effected through examination and approval.

In addition to the enumerated special measures for the administration of access by foreign investment, investment by foreign investors in industries the investment in which by foreign investors is prohibited (restricted) by the state or by international treaties to which China is a signatory or party is prohibited (restricted), and foreign investors are prohibited from investing in projects that would jeopardise national security or public safety or from engaging in business activities that would harm the public interest.

Acquisitions by foreign investors, strategic investments by foreign investors in listed companies and capital contributions by foreign investors made in the form of equity held in enterprises in China carried out in the PFTZ shall comply with the requirements of relevant provisions. Where national security reviews or anti-monopoly reviews are involved, matters shall be handled in accordance with relevant provisions.

Investment in the PFTZ by investors from the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan will be handled with reference to the Negative List. Where provisions of the Closer Economic Partnership Arrangement and its Supplements between the mainland and the Hong Kong Special Administrative Region or Macao Special Administrative Region, the Cross-straits Economic Cooperation Framework Agreement and the subsequent Cross-straits Agreement on Trade in Services, or a free trade agreement entered into by China are applicable to the PFTZ and have market opening measures more favourable for qualified investors, matters will be handled in accordance with the relevant provisions of the arrangement or agreement.

Pursuant to relevant laws and regulations and as required for the development of the PFTZ, the Negative List will be revised as appropriate.

SHANGHAI MUNICIPALITY, SPECIAL ADMINISTRATIVE MEASURES FOR FOREIGN INVESTMENT ACCESS IN THE CHINA (SHANGHAI) PILOT FREE TRADE ZONE (NEGATIVE LIST) (REVISED IN 2014)

(Promulgated by the Shanghai Municipal People's Government on June 30 2014.)

Announcement of the Shanghai Municipal People's Government [2014] No.1

Remarks

Based on relevant laws and regulations, the General Plan for the China (Shanghai) Pilot Free Trade Zone adopted by the State Council, Measures for Further Liberalisation of the China (Shanghai) Pilot Free Trade Zone, the Foreign Investment Industrial Guidance Catalogue (Amended in 2011), etc., the Special Administrative Measures for Foreign Investment Access in the China (Shanghai) Pilot Free Trade Zone (the Negative List) (Revised in 2014) set forth those access measures for foreign-invested projects and the establishment of foreign-invested enterprises in the China (Shanghai) Pilot Free Trade Zone (PFTZ) that are inconsistent with national treatment etc. The Negative List is categorised and prepared on the basis of the Classification and Codes for the Industries of the National Economy (2011), covering 18 industry categories. The Negative List does not apply to the two industry categories S, public administration, social security and social organisations, and T, international organisations.

With respect to sectors not on the Negative List, foreign-invested projects shall, according to the principle of administration of domestic and foreign investment on an equal basis, be subject to the record filing system (except for projects where the State Council has specified that the check and approval system be retained for domestically invested projects); and administration of the establishment of and changes to foreign-invested enterprises shall be effected through record filing. With respect to sectors on the Negative List, foreign-invested projects shall be subject to the check and approval system (except for those foreign-invested projects that the State Council has specified are subject to the record filing system); and administration of the establishment of and changes to foreign-invested enterprises shall be effected through examination and approval.

In addition to the enumerated special measures for the administration of access by foreign investment, investment by foreign investors in industries the investment in which by foreign investors is prohibited (restricted) by the state or by international treaties to which China is a signatory or party is prohibited (restricted), and foreign investors are prohibited from investing in projects that would jeopardise national security or public safety or from engaging in business activities that would harm the public interest.

Acquisitions by foreign investors, strategic investments by foreign investors in listed companies and capital contributions by foreign investors made in the form of equity held in enterprises in China carried out in the PFTZ shall comply with the requirements of relevant provisions. Where national security reviews or anti-monopoly reviews are involved, matters shall be handled in accordance with relevant provisions.

Investment in the PFTZ by investors from the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan will be handled with reference to the Negative List. Where provisions of the Closer Economic Partnership Arrangement and its Supplements between the mainland and the Hong Kong Special Administrative Region or Macao Special Administrative Region, the Cross-straits Economic Cooperation Framework Agreement and the subsequent Cross-straits Agreement on Trade in Services, or a free trade agreement entered into by China are applicable to the PFTZ and have market opening measures more favourable for qualified investors, matters will be handled in accordance with the relevant provisions of the arrangement or agreement.

Pursuant to relevant laws and regulations and as required for the development of the PFTZ, the Negative List will be revised as appropriate.

SHANGHAI MUNICIPALITY, SPECIAL ADMINISTRATIVE MEASURES FOR FOREIGN INVESTMENT ACCESS IN THE CHINA (SHANGHAI) PILOT FREE TRADE ZONE (NEGATIVE LIST) (REVISED IN 2014)