Nationwide Foreign Investment Negative List to be Fully Implemented

A new nationwide negative list for foreign investment has been issued by the National Development and Reform Commission (NDRC). The list – The Catalogue for the Guidance of Foreign Investment Industries (2017 Revision) – comes into force as of 28 July 2017.

As well as those sectors where foreign investments are prohibited, the new edition also details the industries where foreign equity holdings are partially restricted or wholly encouraged. In principle, no restrictive measures with regard to foreign investment will apply to any industries not specified on the negative list.

Among the sectors where foreign investment is subject to certain restrictions are the following:

• The breeding of new species of crops and the production of seeds (equity to be controlled by Chinese party)
• The prospecting for and exploitation of petroleum and natural gas, with the exception of coalbed gas, oil shale, oil sands and shale gas (equity and contractual joint ventures only)
• The prospecting for and exploitation of special and rare varieties of coal (equity to be controlled by Chinese party)
• Publishing (equity to be controlled by Chinese party)
• The smelting and separation of rare earths (equity and contractual joint ventures only)
• The manufacturing of automobiles and special purpose motor vehicles (equity holding of Chinese party to be not less than 50%)

Among the sectors where foreign investment is prohibited are the following:

• Research into and the development, breeding and planting of any species deemed to be rare or unique to China, as well as the production of all relevant breeding materials
• The breeding of genetically modified varieties of crops, livestock, poultry or fish and the production of genetically modified seeds
• Fishing in any marine or inland waters under China's jurisdiction
• The prospecting for and the mining of tungsten, molybdenum, tin, antimony and fluorite
• The prospecting for, mining of and procurement of rare earth elements

In all, the 2017 Catalogue lists 348 items under the encouraged category, including a number of newly designated items designed to encourage foreign participation in the Made in China 2025 programme. Other additions include items relating to innovation-driven development strategies, research, development and the manufacture of intelligent emergency medical rescue equipment, virtual reality (VR) and augmented reality (AR) equipment, and research, development and manufacturing related to 3D printing.

The 2017 Catalogue supersedes all the content and regulations specified in the 2015 edition.

For further details (in Chinese), please refer to the following websites:

Catalogue for the Guidance of Foreign Investment Industries (2017 Revision)

NDRC and MOFCOM Promulgate Catalogue for the Guidance of Foreign Investment Industries (2017 Revision)