Foreign investment in China has become a trend, and according to the analysis of the data of foreign investment in China in the past years, it can be seen that the total amount of foreign direct investment in China is increasing year by year, and the Chinese government has also given a convenient status policy to foreign investors and their family members who come to China. Anyone who has invested in a business in China for three consecutive years and has a stable and good tax status can apply for permanent residence in China.

There is no greater concern for foreign investment than. What can be invested in? What can you not invest in? In order to regulate the types and scope of investment, the Chinese government has promulgated the "Negative List of Foreign Investment", what is the Negative List of Foreign Investment Access, and SFBC will take you through it so that foreigners who want to invest in China can have a better understanding.

Simply put, not all of our domestic industries are open to foreign investors. For foreign investors who want to invest in the country, there are corresponding requirements according to different industries, and the industries within the negative list are those that can only be entered if they meet the requirements (such as having equity ratio requirements, senior management requirements, etc.) or are prohibited from entering.

The Foreign Investment Law and its implementing regulations are the biggest reforms in the field of foreign investment in recent decades, laying down a new basic legal framework for foreign investment in China. The negative list of foreign investment access + foreign investment information reporting system is fully implemented. For the prohibited investment areas in the negative list, foreign investors are not allowed to invest; for the restricted investment areas in the negative list, foreign investors shall meet the corresponding restricted access requirements such as equity and senior management; for the investment areas outside the negative list, enterprises are registered according to the same principle of domestic and foreign investment. Where industry licenses need to be obtained, the competent industrial department shall review the conditions and procedures in accordance with the consistency of domestic and foreign investment. For the establishment of foreign-invested enterprises from the initial case-by-case approval system - filing system (2016) - foreign investment information reporting system (2020).

The negative list of foreign investment access is not enough, because previously the industry authorities have their own set of criteria for the establishment of enterprises, which makes even if the requirements for foreign investment access are met, they still need to continue to pass five hurdles to meet the requirements and approval of the industry authorities. Therefore, the next two things to do in terms of regulation is to clarify the negative market access list, and to integrate all domestic industries with special requirements for the establishment of enterprises into the negative market access list, these requirements are the same for Chinese and foreign investors, and not for foreign investors alone, to truly achieve the "no ban is entry". The Foreign Investment Law also ensures fairness and equity for foreign investors at the legal level. The Foreign Investment Law + the Negative List of Foreign Investment Access + the Negative List of Market Access can protect foreign investors in a clear and unambiguous manner.

In short, a more streamlined negative list of foreign investment access equates to more industries being open to foreign investment and can attract foreign investors to the country.

With the consent of the Party Central Committee and the State Council, the National Development and Reform Commission and the Ministry of Commerce issued Decree No. 32 and Decree No. 33 on June 23, 2020, which promulgated the Special Administrative Measures for Foreign Investment Access (Negative List) (2020 Version) and the Special Administrative Measures for Foreign Investment Access in the Pilot Free Trade Zone (Negative List) (2020 Version), respectively, effective July 23, 2020 Implementation. Special Administrative Measures for Foreign Investment Access (Negative List) (2019 Version) and Special Administrative Measures for Foreign Investment Access in the Pilot Free Trade Zone (Negative List) (2019 Version) shall be repealed at the same time.

It has to be said that the world economy has been seriously affected by the New Crown Pneumonia epidemic, which has dealt a huge blow to global cross-border investment since this year. The release of the 2020 version of the negative list for foreign investment access is an important step to implement a wider scope, broader field and deeper level of comprehensive opening, and the latest supporting document to promote the negative list management system after the implementation of the Foreign Investment Law, demonstrating China's determination to develop economic globalization and multinational investment, further improving the foreign investment environment, promoting high-quality economic development with a higher level of opening, and providing more space for foreigners who want to invest in China.

Click to view the Special Administrative Measures for Foreign Investment Access (Negative List) (2020 Version) and Special Administrative Measures for Foreign Investment Access in the Pilot Free Trade Zone (Negative List) (2020 Version) for details and major changes.

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