In the News: Shortened Foreign Investment Negative Lists; Restrictions on Imported Foods; and Trial Macroprudential Policy Guidelines

Foreign investment negative lists shortened

On December 27, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) jointly released two annually-reviewed "Foreign Investment Negative Lists" that identify sectors where foreign direct investment is restricted or prohibited. The first list applies nationally while the second list applies to pilot free trade zones (FTZs). The number of items on the lists were cut from 33 to 31, and 30 to 27, respectively.

From January 1, foreign investors will enjoy greater access to manufacturing and service sectors. Foreign ownership caps on companies manufacturing passenger car and satellite TV broadcasting components were removed. In FTZs, foreign investors are allowed to invest in certain forms of market research and social surveys, though foreign ownership in social surveys is limited to 33%. The new rules plug a regulatory loophole by requiring domestic companies engaged in sectors covered by the negative lists to seek a waiver from relevant authorities before listing or engaging in share sales overseas. Foreign investors are also barred from participating in the management of these companies and foreign shareholdings in these companies are capped at 33%. Publishing, telecommunications, tobacco, and mining industries continue to be off-limits to foreign investors.