ANNOUNCEMENT 30 Jun 2019

June 30th, 2019 - The Chinese government announced a change in the rules surrounding inbound foreign investment in China.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 0 neutral
  • 1 liberalising

SOURCE

PRC National Development and Reform Commission, June 30th, 2019. (中华人民共和国国家发展和改革委员会中华人民共和国商务部令第25号 《外商投资准入特别管理措施(负面清单)(2019年版)》)
http://www.ndrc.gov.cn/zcfb/zcfbl/201906/t20190628_940274.html

Inception date: 30 Jul 2019 | Removal date: open ended

FDI: Entry and ownership rule

On June 30th, 2019, two Chinese ministries (Ministry of Commerce and National Development and Reform Commission) jointly released the new 'Foreign Investment Negative Catalogue' for the year 2019.

Compared to the previous edition (see related state act), the 2019 list contained some relaxations to the law surrounding inbound foreign investment in China. The relevant changes are included below. All apply to foreign investors:

  • Maximum of 51% stake in shipping firms cancelled;
  • Removed requirement that controlling share in firms involved in gas, heating and water drainage supply for cities exceeding 500,000 population;
  • Removed requirement that controlling share in cinemas and performance arts managing services must be domestic;
  • In the telecoms sector, removed restrictions on foreign ownership of call centres;
  • Removed ban on investment in wild fauna and flora resources development;
    Removed requirement that foreign firms must conduct oil and natural gas exploration in a joint venture with domestic firm;
  • Removed ban on investment in mining of tungsten, molybdenum, tin, antimony and fluorite (domestic firm must still have controlling stake).

Numerically, the number of restrictions in the 2019 list was 40, compared to 2018's 48.

Planned future relaxations, for example, in the financial industry, are also included in the Negative List. These, however, may change before enaction.

The Negative List system was established as part of a means of China 'opening up' to foreign investment.

This new list goes into effect from July 30th, 2019.

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