National Development and Reform Commission and Ministry of Commerce, Draft Negative List for Market Access (Trial Version)

A plan for trial implementation of the negative list system for market access proposed by a provincial-level people's government of a pilot region will be implemented after it is submitted to, and approved by, the State Council. During the pilot period, the provincial-level people's government of a pilot region is required, based on the progress of the reform and any prominent issues reflected by various market entities, to promptly propose recommendations on revising the negative list for market access and improving the Draft. With respect to “new items not provided for in laws, administrative regulations or State Council decisions but which genuinely need to be incorporated into the market access negative list” as stated in the Opinions on Implementing a Negative List System for Market Access (the Opinions), and which, after trial verification, it is determined need to be retained, requests should be made, in accordance with the requirements of the Opinions, by the statutory procedure for the formulation or revision of a law, set of administrative regulations or State Council decision. The National Development and Reform Commission and the Ministry of Commerce, in consultation with relevant departments, will study and consider, by the market access negative list revision procedure specified in the Opinions, the recommendations for the clearing up and revision of the matters enumerated in the Draft proposed by the various departments and, by way of a supplementary circular or otherwise, provide the outcome thereof to the pilot areas to explore and verify in the course of the pilot project.

The prohibited access category of the Negative List mainly contains sectors with excess production capacity, projects of backward production processes and equipment, and projects that harm the environment and ecology such as certain new projects of the petrochemical, steel, coal, textiles, non-ferrous metal, machinery and light industries.

Also, for retail and wholesaling, the sale of foreign encrypted products is prohibited. Commercial banks are prohibited from engaging in trust investment or securities business. Individuals or insurance organizations not established in accordance with the Insurance Law or relevant laws or regulations are prohibited from engaging in the insurance business. A port tally business operator is prohibited from also engaging in cargo loading/unloading and warehousing.

The restricted access category is divided into 22 sections covering sectors such as mining, manufacturing, construction, retail, wholesaling, transportation, financial industry, real estate, leasing, commercial services, information technology, environment, education and entertainment.

Activities that currently require permission are included in the restricted access category and require permission, qualification attainment or statutory procedures, including:

(1) food (including health food) production;

(2) manufacturing of pharmaceuticals and medical equipment;

(3) design, manufacturing, use, import and export of civil aircraft;

(4) network access of telecommunications equipment;

(5) sale of products designated for the security of internet information systems;

(6) production, sale, import and export of commercial encrypted products;

(7) engaging in construction projects;

(8) provision of internet information services;

(9) establishment of banks, securities firms, insurance companies and futures companies;

(10) issuance of shares and bonds;

(11) acquisition and division of listed companies;

(12) real estate development, valuation and management;

(13) establishment of law firms, accounting firms and human resources firms;

(14) lawyer's practice and patent agency;

(15) establishment of Sino-foreign cooperative schools, medical institutions and publishing entities; and

(16) establishment of radio and television stations as well as film production and distribution entities.

Issued: March 2 2016

Effective: as of the date of approval by the State Council of the plan for the pilot reform of the negative list system for market access of each pilot area.

Main contents: The Draft will be implemented in Tianjin, Shanghai, Fujian and Guangdong for trial. It contains a total of 328 items, including 96 in the prohibited access category and 232 in the restricted access category.

The Draft covers matters up to December 31 2015. From January 1 2016, where the State Council decides to abolish, newly create or revise items subject to administrative examination and approval; decides to revise the Catalogue for Guiding Adjustment of the Industrial Structure or the List of Investment Projects Subject to Government Check and Approval; or formulates new provisions in respect of the industries, sectors and businesses that market entities are prohibited or restricted from investing and operating in, the most recent provisions shall prevail.

A plan for trial implementation of the negative list system for market access proposed by a provincial-level people's government of a pilot region will be implemented after it is submitted to, and approved by, the State Council. During the pilot period, the provincial-level people's government of a pilot region is required, based on the progress of the reform and any prominent issues reflected by various market entities, to promptly propose recommendations on revising the negative list for market access and improving the Draft. With respect to “new items not provided for in laws, administrative regulations or State Council decisions but which genuinely need to be incorporated into the market access negative list” as stated in the Opinions on Implementing a Negative List System for Market Access (the Opinions), and which, after trial verification, it is determined need to be retained, requests should be made, in accordance with the requirements of the Opinions, by the statutory procedure for the formulation or revision of a law, set of administrative regulations or State Council decision. The National Development and Reform Commission and the Ministry of Commerce, in consultation with relevant departments, will study and consider, by the market access negative list revision procedure specified in the Opinions, the recommendations for the clearing up and revision of the matters enumerated in the Draft proposed by the various departments and, by way of a supplementary circular or otherwise, provide the outcome thereof to the pilot areas to explore and verify in the course of the pilot project.

The prohibited access category of the Negative List mainly contains sectors with excess production capacity, projects of backward production processes and equipment, and projects that harm the environment and ecology such as certain new projects of the petrochemical, steel, coal, textiles, non-ferrous metal, machinery and light industries.

Also, for retail and wholesaling, the sale of foreign encrypted products is prohibited. Commercial banks are prohibited from engaging in trust investment or securities business. Individuals or insurance organizations not established in accordance with the Insurance Law or relevant laws or regulations are prohibited from engaging in the insurance business. A port tally business operator is prohibited from also engaging in cargo loading/unloading and warehousing.

The restricted access category is divided into 22 sections covering sectors such as mining, manufacturing, construction, retail, wholesaling, transportation, financial industry, real estate, leasing, commercial services, information technology, environment, education and entertainment.

Activities that currently require permission are included in the restricted access category and require permission, qualification attainment or statutory procedures, including:

(1) food (including health food) production;

(2) manufacturing of pharmaceuticals and medical equipment;

(3) design, manufacturing, use, import and export of civil aircraft;

(4) network access of telecommunications equipment;

(5) sale of products designated for the security of internet information systems;

(6) production, sale, import and export of commercial encrypted products;

(7) engaging in construction projects;

(8) provision of internet information services;

(9) establishment of banks, securities firms, insurance companies and futures companies;

(10) issuance of shares and bonds;

(11) acquisition and division of listed companies;

(12) real estate development, valuation and management;

(13) establishment of law firms, accounting firms and human resources firms;

(14) lawyer's practice and patent agency;

(15) establishment of Sino-foreign cooperative schools, medical institutions and publishing entities; and

(16) establishment of radio and television stations as well as film production and distribution entities.