Client Alert | 5 July 2018

China further opens for foreign investment

The Chinese National Development and Reform Commission (NDRC) together with the Chinese Ministry of Commerce (MOFCOM) recently released two revised “negative lists” for foreign investment in China’s free-trade zones (FTZ’s) and the rest of China. Both lists will become effective end of July and further open China for foreign investment. Not least, restrictions on investments in the Chinese financial services sector will be cancelled.


On 28 June 2018, NDRC and MOFCOM released the Special Administration Measures on Access to Foreign Investment (Negative List) (2018 Version) (外商投资准入特别管理措施 [负面清单][2018年版]). This new Negative List will become effective on 28 July 2018 and then replace the Catalogue of Industries for Guiding Foreign Investment (Revision 2017).


The revised Negative List will widen market access for foreign investment in China: The new list details 22 opening-up measures in various sectors such as financial services, infrastructure, transportation, energy, resources, and agriculture. Furthermore, the number of items subject to special administrative measures will be cut from 63 to 48. Investments in areas not subject to the Negative List will only need to be registered according to a “filing for record” procedure.


In the financial services sector, for instance, the restriction on foreign shareholdings in Chinese banks will be cancelled (as announced). Foreign maximum shareholding ratios in securities, fund management, futures, and life insurance companies will initially be increased to 51%. In 2021, the restrictions on foreign shareholding ratios will be cancelled in all financial services sectors. The full text of the new Negative List can be found here (Mandarin).


Two days after the release of the new Negative List, on 30 June 2018, NDRC and MOFCOM also issued a revised negative list for China’s free-trade zones (FTZ Negative List, 自由贸易试验区外商投资准入特别管理措施[负面清单][2018年版]), which will take effect from 30 July 2018. The full text of the revised FTZ Negative List can be found here (Mandarin).


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