What's in the 11th Foreign Investment Negative List?

The 11th Foreign Investment Negative List was released in China on June 30, 2021. The Negative List identifies industries and sectors whereforeign investmentis restricted or prohibited. In this article, we'll examine the key points of the 11th Foreign Investment Negative List and its implications for foreign investors.

What are the changes to the 11th Foreign Investment Negative List?

The 11th Foreign Investment Negative List has a total of 123 items, which is one less than the previous list. The main change in the 11th edition is the relaxation of restrictions in some sectors, such as construction, transportation, and mining. For example, foreign investors can now hold a majority stake in joint ventures engaged in the construction and operation of railway passenger transportation services. Additionally, restrictions on foreign investment in the mining industry have been lifted, allowing foreign investors to hold up to 50% of the shares in exploration and exploitation of special and rare coal mines.

What sectors are still restricted or prohibited?

Despite the relaxation of restrictions in some sectors, there are still industries where foreign investment is restricted or prohibited. These industries include internet news services, radio, and television broadcasting, as well as the production and sale of tobacco products. Furthermore, foreign investment in industries related to national security, such as military defense, is still prohibited.

What are the implications for foreign investors?

The 11th Foreign Investment Negative List shows that China is continuing to open up to foreign investment. The relaxed restrictions in some sectors will provide new opportunities for foreign investors looking to enter the Chinese market. However, it is important to note that there are still restrictions in certain industries, and investors should carefully consider the Negative List before pursuing investment opportunities in China.

What are some investment strategies for navigating the Negative List?

One strategy for navigating the Negative List is to focus on sectors that have been newly opened up to foreign investment. For example, the relaxation of restrictions in the construction sector could provide opportunities for foreign investors to invest in infrastructure projects. Another strategy is to partner with local companies that have expertise in therestricted industries. By collaborating with alocal partner, foreign investors may be able to navigate the regulatory hurdles associated with investing in these sectors.

In conclusion, the 11th Foreign Investment Negative List represents a continued effort by China to open up to foreign investment. While there are still restrictions in certain industries, the relaxation of restrictions in other sectors will provide new opportunities for foreign investors. By carefully considering the Negative List and developing a strategic approach, foreign investors can successfully navigate the Chinese market.