China shortens negative list for foreign investment

China eliminated the restrictions on foreign investment in banking, securities, automobile manufacturing, as well as construction of power grid, railway trunk line network and chain gas stations starting July 28.

The National Development and Reform Commission and the Ministry of Commerce released a list with the official name "The Special Administrative Measures (Negative List) for Foreign Investment Access (2018 Edition)," on June 28 to widen the market access for foreign investment in 22 fields.

1. Wider opening-up in the service sector

Finance:

The restrictions on foreign ownership in entities such as securities, insurance and futures companies have been relaxed to 51 percent. The figure is set to rise to 100 percent by 2021.

Infrastructure:

The railway trunk line network and grid foreign investment restrictions have been removed.

Transport:

The restrictions on foreign investment in railway passenger transportation companies, international maritime transport and international shipping agencies have been eliminated.

Commercial and trade distribution:

Restrictions on foreign investment in gas stations, grain purchases and wholesales have also been eliminated.

Culture:

Prohibition on foreign investment in any business site of Internet access services has been removed.

2. Preliminarily opening the manufacturing

Automobile:

The relaxation in the equity cap restrictions for companies that produce new energy vehicles and special-purpose vehicles. The limits will be terminated for commercial car producers in 2020 and for passenger car producers from 2022.  Foreign carmakers will also be allowed to have more than two Chinese joint ventures in 2022.

Shipbuilding:

The limits on foreign investment in ship design, manufacturing and maintenance have been eliminated.

Airplane:

The manufacturing of planes for flying on trunk and regional routes, general aviation aircraft, helicopters and unmanned aerial vehicles will benefit from the relaxation in the foreign investment restrictions.

3. Broader market access for agriculture, energy and resource

Agriculture:

The limits on foreign investment in the production of crop seeds, except for wheat and corn, have been removed.

Energy:

The restrictions on special and rare coal exploitation and mining have been eliminated.

Resource:

The limits on exploration and mining of graphite, smelting and separation of rare earth, and smelting of tungsten have been removed.