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China Issues Shortest-Ever Foreign Investment Negative List

The number of sectors proscribed by the 2018 edition of China’s foreign investment negative list has dropped to 48, a fall of 15 compared to the 2017 list. The updated edition, issued by the National Development and Reform Commission and the Ministry of Commerce on 28 June this year, also details the introduction of enhanced opening-up measures in 22 designated sectors:   

  •  Foreign investments in rare-earth-smelting and separations operations are no longer to be restricted to equity and cooperative joint-venture arrangements, while all investment access limitations related to tungsten-smelting have also been abolished
  • As of 28 July this year, the foreign investment limits relating to special and new-energy vehicle manufacturing are to be lifted, with the commercial vehicle sector set to be free of the same restraints in 2020 and the passenger vehicle sector to follow suit in 2022. The current regulations that restrict an foreign passenger vehicle manufacturer to participating in a maximum of two joint ventures will also be rescinded in 2022
  • The mainland operations of international maritime transport companies are no longer to be restricted to equity and cooperative joint ventures
  • The requirement that a single foreign financial institution may own a maximum of 20% (or, in the case of multiple financial institutions, a joint maximum of 25%) of the shares of a domestic Chinese commercial bank is to be withdrawn
  • As of 28 July this year, foreign investors will be entitled to hold a maximum stake of 51% in a mainland-based securities, securities investment fund management, futures or life insurance company. As of 2021, this remaining restriction will be removed
  • For the first time, foreign investment is to be permitted in running venues that provide internet access service

The new negative list –  The Special Administrative Measures for Foreign Investment Access (2018) –  will come into effect on 28 July 2018 and supersede any previously-issued version. The currently-prevailing Catalogue of Encouraged Industries for Foreign Investment, however, will remain in force.

For further details (in Chinese), please visit the following link:


Content provided by Picture: HKTDC Research
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