Sectors off-limits for foreign investors being reduced from 40 to 33
China has unveiled new, shortened negative lists for foreign investment, as part of efforts to further open up the economy and improve its business environment amid the novel coronavirus epidemic.
The number of sectors that are off-limits for foreign investors will be cut to 33 in the 2020 version of the negative list from 40 in the 2019 version, according to a statement jointly released on June 23 by the National Development and Reform Commission and the Ministry of Commerce.
China also unveiled its 2020 negative list for foreign investment in pilot free trade zones, cutting the number of prohibited industries to 30 from 37.
The two new negative lists will take effect on July 23.
According to the new lists, foreign ownership caps on securities, fund management, futures, life insurance companies, as well as commercial vehicle enterprises will be removed. Ownership by foreign investors in wheat breeding and seed production can be raised to up to 66 percent.
Foreign investors will be allowed to invest in sectors including prepared slices of traditional Chinese medicine, the smelting and processing of radioactive minerals, and the production of nuclear fuel.
In the area of infrastructure industry, foreign investors will be allowed to take majority shares in joint ventures that engage in the building and operation of water supply and drainage networks in cities with a population of more than 500,000.
In education, wholly foreign-owned institutions for vocational education will be allowed.
Foreign direct investment into the Chinese mainland, in actual use, expanded by 7.5 percent year-on-year to 68.63 billion yuan in May, said Gao Feng, spokesperson for the Ministry of Commerce, at a press conference.
In US dollar terms, the FDI inflow stood at US$9.87 billion, up by 4.2 percent year-on-year.
From January to May, the country’s FDI totaled 355.18 billion yuan, down 3.8 percent year-on-year, narrowing by 7 percentage points compared to the first quarter of the year.
Commerce Minister Zhong Shan earlier said China will continue to effectively implement the Foreign Investment Law to create a fair and transparent business environment for global companies.
Zhong said China will better protect intellectual property rights and the legitimate rights and interests of overseas businesses, as well as make sure that they are willing to invest and develop in China.
To maintain solid economic fundamentals, the government has emphasized the importance of focusing on the “six priorities” of safeguarding employment, people’s livelihoods, the development of market entities, food and energy security, the stable operation of industrial and supply chains, and the smooth functioning of society.
Mark Dorn, president for Asia-Pacific of Henkel Corp, the German chemical and consumer goods company, said as the pandemic is being contained, China has started to place increasing focus on ensuring stability in key areas such as employment, foreign trade, foreign investment and market expectations.
Policies such as the Foreign Investment Law, proposed at the two sessions last year and put into effect on Jan 1, showed the continuous opening-up of the Chinese market and created a healthier and more competitive business environment — with new opportunities for multinationals, he said.
Howard Ozawa, president and CEO of Canon China, said his company looks forward to greater investment and development in R&D, production and sales in China, and has great expectation of China’s economic recovery.
Xinhua contributed to the report.
