2024 Negative List for Foreign Investment Access
On 8 September 2024, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) issued the Special Administrative Measures for Foreign Investment Access (Negative List) (2024 Version), which came into effect on 1 November 2024, with a reduction of restrictive measures on the national negative list from 31 to 29, and the abolition of restrictive measures on foreign investment access in the manufacturing sector.
Complete removal of restrictive measures in the Manufacturing Sector
Compared with the 2021 version, the 2024 version removes the two remaining restrictive measures in the manufacturing sector, i.e., “The Chinese side shall control printing of publications” and “Investment in the application of the techniques of steaming, stir-frying, roasting, calcining and other preparations of traditional Chinese medicine and the production of confidential prescription products of proprietary Chinese medicines shall be prohibited”.
After this revision, the restrictive measures on the national negative list for foreign investment access have been reduced from 31 to 29, and the restrictive measures on foreign investment access in the manufacturing sector have been “zeroed out”.
The manufacturing industry is the area in which China opened up the earliest, the market is the most competitive, and the global industrial division of labor is the closest. The full abolition of the restrictive measures on foreign investment access fully demonstrates China’s positive willingness to expand international cooperation and its distinctive attitude in support of economic globalization. Also, it reflects China’s determination to support exchanges and cooperation between Chinese and foreign enterprises, and to promote the development of the manufacturing industry in a higher-end, smarter, and greener way, relying on the advantages of its mega-sized market.
Promote steadily the liberalization of the Service Sector
The NDRC, in conjunction with relevant departments, will continue to promote the expansion and opening up of the service industry, to realize that foreign investment can not only “Enter well” but also “Develop well”.
- On the one hand, the relevant industry authorities have initiated the opening-up pilot work in areas such as value-added telecommunications, and will follow up with the construction of platforms such as pilot free trade zones and free trade harbors to carry out the opening-up pilot work in relevant areas in a solid manner;
- On the other hand, the NDRC is studying the revision of the Catalogue of Industries for Encouraging Foreign Investment, focusing on increasing the number of service industry entries and guiding more foreign investment in the service industry.
Management Principles and Risk Prevention and Control
For areas outside the negative list, China will manage them following the principle of consistency between domestic and foreign investment and give national treatment to foreign-invested enterprises. This will ensure that foreign-invested enterprises can enjoy a fair and just market environment in China and further enhance the marketization, rule of law, and internationalization of the business environment.
At the same time, China also insists on integrating openness and security and doing a good job of risk prevention and control. For newly opened areas, China has established a relatively standardized and mature industry regulatory system, and foreign investors coming to China to invest in projects in freshly opened areas are required to abide by the same relevant laws and regulations, regulatory provisions, industry guidelines, etc., as domestic investors, to expand opening up under the premise of ensuring safety, and to realize the benign interaction between high-quality development and a high level of safety.
Summary
The implementation of the 2024 version of the Negative List for Foreign Capital Entry is an important measure to expand China’s opening up to the outside world at a high level, which is of great significance in increasing the supply of high-quality products and services, promoting healthy competition in the domestic market, providing broader space for multinational corporations to develop in China, and fostering international cooperation and win-win situation for mutual benefit.
With the complete abolition of restrictions on the entry of foreign investors in manufacturing industries and the steady progress of opening up the service industry, China will participate in the division of labor and cooperation of global industries at a deeper level, further enhancing the scale and quality of attracted investments, accelerate the development of new-quality productive forces, and promote a high-quality industrial chain of economy.
At the same time, China will seek to strike a balance between opening up and security, ensure the stable and healthy development of the open economy, and allow more multinational companies to share the opportunities of investing in China, so that more multinational corporations can share the opportunities of investing in China and have peace of mind about their long-term business and development in China.
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