Negative List for the Access of Foreign Investment in the Pilot Free Trade Zones (2017)
2018-05-04 1511
Notice of the General Office of the State Council on Issuing the Special Management Measures (Negative List) for the Access of Foreign Investment in the Pilot Free Trade Zones (2017)
· Document Number:No. 51 [2017] of the General Office of the State Council
· Area of Law: Foreign Economy and Trade Reform and Opening-up Pilot Free Trade Zone
· Level of Authority: Regulatory Documents of the State Council
· Date issued:06-05-2017
· Effective Date:07-10-2017
· Status: Effective
· Issuing Authority: General Office of the State Council
Notice of the General Office of the State Council on Issuing the Special Management Measures (Negative List) for the Access of Foreign Investment in the Pilot Free Trade Zones (2017)
(No. 51 [2017] of the General Office of the State Council)
The people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government; and all ministries and commissions of the State Council and all institutions directly under the State Council:
The Special Management Measures (Negative List) for the Access of Foreign Investment in the Pilot Free Trade Zones (2017), with the consent of the State Council, are hereby issued. Having further relaxed the foreign investment access, this revision is an important measure for implementing a new round of high-level opening up. All regions and departments shall diligently implement these Measures, enhance the service awareness, improve the supervision level, and effectively prevent and control risks. You shall, in a timely manner, report all significant issues, if any, encountered in the implementation thereof to the State Council for instructions.
The Special Management Measures (Negative List) for the Access of Foreign Investment in the Pilot Free Trade Zones (2017) shall come into force on July 10, 2017. The Special Management Measures (Negative List) for the Access of Foreign Investment in the Pilot Free Trade Zones issued on April 8, 2015 shall be concurrently repealed.
General Office of the State Council
June 5, 2017
Special Management Measures (Negative List) for the Access of Foreign Investment in the Pilot Free Trade Zones (2017)
Explanations
I. The Special Management Measures (Negative List) for the Access of Foreign Investment in Pilot Free Trade Zones (2017) (hereinafter referred to as the “Negative List for Pilot Free Trade Zones”) is prepared in accordance with the relevant laws and regulations currently in force and has been approved by the State Council and is hereby issued. The Negative List, which has set out the special management measures for the access of foreign investment that are inconsistent with the national treatment and other principles, is applicable to the pilot free trade zones (hereinafter referred to as “pilot free trade zones”).
II. The Negative List for Pilot Free Trade Zones is divided into 15 categories, 40 entries and 95 special management measures in accordance with the Classification of Industries in National Economy (GB/T4754-2011). In comparison with the previous edition, 10 entries and 27 measures are reduced. In particular, special management measures include measures for specific industries and measures applicable to all industries.
III. The special management measures related to national security, public order, public culture, financial prudence, government procurement and subsidies, special formalities, nonprofit organizations and taxation that are not set out in the Negative List for Pilot Free Trade Zones shall be governed by the provisions in force. Where foreign investment in pilot free trade zones involves national security, a security review shall be conducted in accordance with the Interim Measures for the National Security Review of Foreign Investment in Pilot Free Trade Zones.
IV. The non-prohibited investment fields in the Negative List for Pilot Free Trade Zones shall be subject to access permit of foreign investment. The fields that are not covered in the Negative List for Pilot Free Trade Zones shall be managed under the principle of “equal treatment to both domestic and foreign investors” in pilot free trade zones.
V. The Negative List for Pilot Free Trade Zones shall apply, by reference, to investment made by investors from the Hong Kong Special Administrative Region, the Macao Special Administrative Region, and the Taiwan Region. If there are any more favorable opening-up measures for qualified investors in the Closer Economic Partnership Agreement and its supplementary agreements between the mainland and Hong Kong or Macao, the Cross-Straits Economic Framework Agreement, and the free trade agreements signed by China, which are applicable to pilot free trade zones, the provisions of the relevant agreements shall apply.
Special Management Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (2017)
| Field | Special Management Measures |
I. Agriculture, forestry, animal husbandry, and fishery | ||
1. | Seed industry | (1) It is prohibited for foreign investors to invest in the research and development, cultivation, and plantation of China's rare and specific precious and good varieties and engage in the production of corresponding propagation materials (including good genes in plantation, animal husbandry, and aquaculture). |
2. | Fishery industry | (5) Fishery activities within the territory of China and within the water areas under China's jurisdiction shall be subject to approval of the Chinese government; and foreign fishing vessels shall not be registered as Chinese nationality. |
II. Mining industry | ||
3. | Exploration and development of the exclusive economic zones, continental shelves and other sea areas under the jurisdiction of China | (6) The exploration, drilling and development of China's exclusive economic zones, continental shelves and other sea areas under the jurisdiction of China shall be subject to the approval of the Chinese government. |
4. | Exploitation and auxiliary exploitation activities of oil and natural gas | (7) Investment in the exploration and development of oil, natural gas and coal-bed gas shall be made by signing production sharing contracts with oil and gas companies that are approved by the Chinese government and that have a foreign cooperative franchise. |
5. | Mining and milling, and auxiliary exploitation activities of non-ferrous metal and non-metallic mines | (8) It is prohibited for foreign investors to invest in the exploration, exploitation, and beneficiation of rare earth; it is prohibited for foreign investors to enter, without approval, into the rear earth mining areas or to acquire geological data of mines, ore samples, and production technologies and techniques. |
6. | Exploitation and beneficiation of metal ores and non-metal ores | (11) Exploration and exploitation of graphite |
III. Manufacturing | ||
7. | Aviation manufacturing | (12) The design, manufacturing, and maintenance of trunk-line and regional aircrafts shall be controlled by the Chinese parties; the design, manufacturing, and maintenance of general-purpose airplanes of 6 tons and 9 seats or more shall be restricted to joint venture and cooperation; and the manufacturing of the ground-effect and surface-effect aircrafts as well as the design and manufacturing of unmanned aerial vehicles (UAV) and aerostats shall be controlled by the Chinese parties. |
8. | Shipbuilding | (13) The repair, design and manufacturing of ships (including blocks) shall be controlled by the Chinese parties. |
9. | Automobile manufacturing | (14) For the manufacturing of whole vehicles and special-purpose vehicles, the Chinese parties shall not hold less than 50% of the shares; and a foreign investor may establish two or less joint venture enterprises that manufacture similar whole vehicles (passenger vehicles and commercial vehicles) in China. If the foreign investor merges any other Chinese vehicle manufacturer jointly with its Chinese joint venture partner, it is not subject to the aforesaid restriction on the establishment of two or less joint venture enterprises in China. |
10. | Manufacturing of communications equipment | (15) The manufacturing of ground receiving facilities for satellite television broadcasting and key components. |
11. | Smelting and rolling of non-ferrous metal, as well as smelting and processing of radioactive minerals | (16) Smelting of tungsten. |
12. | Processing of traditional Chinese medicine decoction pieces and production of Chinese patent medicine | (19) It is prohibited for foreign investors to invest in the application of such processing techniques as steaming, frying, grilling, and calcination of traditional Chinese medicine decoction pieces and the manufacturing of Chinese patent medicine with confidential prescriptions. |
13. | Processing of nuclear fuel and nuclear radiation | (20) The manufacturing, operation, import and export of nuclear fuels, nuclear materials, uranium products and related nuclear technologies shall be monopolized by qualified Chinese state-owned enterprises. |
14. | Other manufacturing industries | (22) It is prohibited for foreign investors to invest in such ethnic traditional crafts as ivory carvings, tiger bone processing, and production of rice paper and ink stick. |
IV. Electric power, heat, gas, and water production and supply | ||
15. | Nuclear power generation | (23) The construction and business operation of nuclear power stations shall be controlled by the Chinese parties. |
16. | Pipeline network facilities | (24) The construction and operation of gas, heat, and water supply and drainage pipeline networks in cities with a population of more than 500,000 shall be controlled by the Chinese parties. |
V. Wholesale and retail | ||
17. | Monopolistic and franchising | (26) It is prohibited for foreign investors to invest in the production, wholesale, retail import or export of tobacco, cigarettes, re-dried leaf tobacco or any other tobacco products. |
VI. Transportation, warehousing and postal services | ||
18. | Railway transportation | (30) The construction and operation of trunk railway networks shall be controlled by the Chinese parties. |
19. | Water transportation | (32) Water transport companies (excluding international shipping companies that are established within China (Shanghai) Pilot Free Trade Zone) shall be controlled by the Chinese parties, and shall not engage in domestic water transportation business or its auxiliary business (including domestic ship management, domestic ship agency, domestic waterway passenger transport agency, and domestic waterway cargo transport agency, among others) in disguise by means of leasing Chinese vessels or shipping space. |
20. | Air transport of passengers and cargoes | (35) Public air transport enterprises shall be controlled by the Chinese parties and the proportion of investment made by a single foreign investor (including its affiliated enterprises) may not exceed 25%. The legal representative of an enterprise shall be assumed by a Chinese citizen. Only Chinese public air transport enterprises may provide domestic air services (operate domestic transport rights) and provide regular and irregular international air services as Chinese designated carriers. |
21. | General air services | (36) General aviation enterprises shall be restricted to formation by means of joint venture. Except general aviation enterprises that are specialized in the work of agriculture, forestry, and fishery, other general aviation enterprises shall be controlled by the Chinese parties. The legal representative of an enterprise shall be assumed by a Chinese citizen. A foreign aircraft or foreigner using a Chinese aircraft to carry out general aviation flight activities within the territory of China shall obtain prior approval. |
22. | Airports and air traffic management | (37) It is prohibited for foreign investors to invest in and operate the air a traffic control system. |
23. | Postal industry | (39) It is prohibited for foreign investors to invest in postal enterprises or operate postal services. |
VII. Information transmission, software and information technology services | ||
24. | Telecommunications | (41) Telecommunications companies are only allowed to engage in telecommunications business under China's commitment to opening up to the outside world in its entry into the WTO. In particular, the proportion of foreign capital in value-added telecommunications services (excluding e-commerce) shall not exceed 50%; basic telecommunications service operators shall be companies that are legally established for specially engaging in basic telecommunications services; and the state-owned equities or shares in such companies account for no less than 51% (The original areas of China (Shanghai) Pilot Free Trade Zone, 28.8 square kilometers, shall be governed by the policies currently in force). |
25. | Internet and related services | (42) It is prohibited for foreign investors to invest in Internet news information services, Internet publishing services, Internet audio-visual program services, Internet culture operation (except music), or services of information release to the public through the Internet (except those under China's commitment to opening up to the outside world in its entry into the WTO). |
VIII. Finance | ||
26. | Banking services | (45) To invest in a banking financial institution, a foreign investor shall be a financial institution or an institution of a specific type. Specific requirements: |
27. | Capital market services | (50) The proportion of foreign capital in a futures company shall not exceed 49%. |
28. | Insurance industry | (56) The proportion of foreign capital of a life insurance company shall not exceed 50%; and the shares of an insurance assets management company aggregately held by domestic insurance companies shall not be lower than 75%. |
IX. Leasing and commercial services | ||
29. | Legal services | (58) A foreign law firm may enter China only by means of representative offices. The establishment of a representative office and the dispatching of representatives in China shall obtain the approval of China's administrative departments of justice. |
30. | Consulting and survey | (61) It is prohibited for foreign investors to invest in social surveys. |
X. Scientific research and professional technological services | ||
31. | Professional technical services | (63) It is prohibited for foreign investors to invest in the geodetic surveying, marine charting, aerial photography for surveying and mapping, surveying and mapping of administrative boundaries, and the compilation of topographic maps, world administrative region maps, national administrative region maps, administrative region maps at the provincial level or below, national education maps, local education maps, and true three-dimensional maps, the compilation of navigation electronic maps, and such surveys as regional geological mapping, mineral geology, geophysics, geochemistry, hydrogeology, environmental geology, geological disasters, and remote sensing geology. |
XI. Water conservancy, environment, and public facility management | ||
32. | Conservation of wild animal and plant resources | (67) It is prohibited for foreign investors to invest in the development of wildlife resources originating from China under state protection. |
XII. Education | ||
33. | Education | (69) No foreign educational institution, other organization or individual may independently establish schools or other educational institutions whose primary purpose is to enroll Chinese citizens (excluding those providing non-academic vocational skill training). |
XIII. Health and social work | ||
34. | Sanitation | (71) Medical institutions are subject to joint venture and cooperation. |
XIV. Culture, sports and entertainment | ||
35. | Radio and television broadcasting, transmission, production, and operation | (72) It is prohibited for foreign investors to invest in the establishment and operation of radio stations and television stations at various levels, radio and television frequency channels and time columns, radio and television transmission networks (radio and television transmitters, relay stations [including repeater stations and receive-rebroadcast stations], radio and television satellites, satellite uplink stations, satellite receive-rebroadcast stations, microwave stations, monitoring stations, and cable radio and television transmission networks), and It is prohibited for foreign investors to engage in radio and television Video-on-Demand services and installation services of ground receiving facilities for satellite television broadcasting. |
36. | Press and publication, radio and television, and financial information | (76) It is prohibited for foreign investors to invest in the establishment of news agencies, press agencies, publishing houses, and news organizations. |
37. | Film production, distribution and showing | (84) It is prohibited for foreign investors to invest in any film production company, film distribution company, or cinema company. However, with the approval, Chinese and foreign enterprises are allowed to produce films. |
38. | Protection of cultural relics and intangible cultural heritage | (86) It is prohibited for foreign investors to invest in and operate enterprises conducting the auction of cultural relics and the purchase and sale of cultural relics. |
39. | Culture and entertainment | (91) It is prohibited for foreign investors to establish performing arts groups. |
XV. All industries | ||
40. | All industries | (93) It is prohibited for foreign investors to engage in business activities as an individual industrial and commercial household, investor of a sole proprietorship enterprise, and member of a specialized farmers cooperative. |
Measures of the Special Management Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (2017) Reduced from the Previous Edition
| Field | Special Management Measures Reduced from the Previous Edition |
Mining industry | Exploitation and beneficiation of metal ores and non-metal ores | (1) The exploration and exploitation of precious metals (gold, silver, and platinum group) are restricted. |
(2) The exploitation and beneficiation of lithium mines are restricted. | ||
Manufacturing | Aviation manufacturing | (3) The design and manufacturing of civil helicopters of 3 tons or above shall be controlled by the Chinese parties. |
(4) The design, manufacturing and maintenance of general-purpose airplanes of 6 tons and 9 seats or less shall be restricted to joint venture and cooperation. | ||
Shipbuilding | (5) The manufacturing of low- and medium-speed diesel engines and crankshafts shall be controlled by the Chinese parties. | |
(6) The manufacturing and maintenance of marine engineering equipment (including modules) shall be controlled by the Chinese parties. | ||
Automobile manufacturing | (7) The products that are manufactured by new pure electric passenger vehicle manufacturers shall use their own brands, their own intellectual property rights, and corresponding licensed patents. | |
Manufacturing of rail transportation equipment | (8) The manufacturing of rail transportation equipment shall be carried out by means of joint venture and cooperation (excluding the research and development, design and manufacturing of passenger service facilities and equipment supporting high-speed railways, railway passenger-dedicated lines, and intercity railway; the research and development, design and manufacturing of track and bridge equipment related to high-speed railways, railway passenger-dedicated lines, and intercity railways; the manufacturing of electrified railway equipment and materials; and the manufacturing of passenger train sewerage equipment). | |
(9) The localization rate of equipment in urban rail transit projects shall reach 70% or more. | ||
Manufacturing of communications equipment | (10) The design and manufacturing of civil satellites and the manufacturing of civil satellite payloads shall be controlled by the Chinese parties. | |
Mineral smelting and rolling processing | (11) The smelting of such rare metals as molybdenum, tin (excluding tin compounds), and antimony (including antimony trioxide and antimony sulfide) is restricted in investment access. | |
Pharmaceutical manufacturing | (12) It is prohibited for foreign investors to invest in the processing of Chinese medicinal herbs that are listed in the Regulation on the Protection of Wild Medicinal Resources and the List of Rare and Endangered Plants in China. | |
Transportation industry | Road transportation | (13) Highway passenger transport companies are restricted in investment access. |
Water transportation | (14) Ocean shipping tally is restricted in investment access and is subject to joint venture and cooperation. | |
Information technology services | Internet and related services | (15) It is prohibited for foreign investors to invest in any Internet surfing service premise. |
Financial industry | Banking services | (16) A foreign bank shall not serve as an agent in such business as “issuing, cashing and undertaking the sale of government bonds,” as described in the Law of the People's Republic of China on Commercial Banks. |
(17) To obtain the approval for engaging in the RMB business, a foreign bank shall satisfy the requirement for the minimum opening time. | ||
(18) To invest in a financial assets management company, a foreign investor shall satisfy the requirements for a certain amount of total assets. | ||
Insurance business | (19) Without the approval of the Chinese insurance regulatory department, no foreign-funded insurance company may engage in the outward reinsurance or inward reinsurance with its affiliated enterprise. | |
Leasing and commercial services | Accounting and auditing | (20) The person that serves as the chief partner of an accounting firm in the form of a special general partnership (or holds any other position to perform the supreme management functions) shall be a Chinese citizen. |
Statistical surveys | (21) The system for the accreditation of foreign-related survey agencies and the system for the approval of foreign-related social survey projects shall be implemented. | |
(22) Rating services are restricted in investment access. | ||
Other commercial services | (23) The legal representative of an entry and exit intermediary shall be a Chinese citizen that has a permanent residence in China and has full capacity for civil conduct. | |
Education | Education | (24) It is prohibited for foreign investors to establish military, police, political, party schools or other educational institutions of special areas. |
Culture, sports and entertainment | Press and publication, radio and television, and financial information | (25) It is prohibited for foreign investors to engage in the import of such cultural products as artworks, and digital literature database and their publications (excluding those under China's commitment to opening up to the outside world in its entry to the WTO). |
Culture and entertainment | (26) Performance agencies are restricted in investment access and shall be controlled by the Chinese parties (“except those providing services for the provinces or cities” is adjusted to “except those providing services in the provinces or cities with free trade zones”). | |
(27) The construction and operation of large-scale theme parks are restricted in investment access. |
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*Note: In comparison with the previous edition, a total of 10 entries and 27 measures have been reduced in the Measures of the Special Management Measures (Negative List) for the Access of Foreign Investment in Pilot Free Trade Zones (2017). Entries reduced include six entries such as manufacturing of rail transportation equipment, pharmaceutical manufacturing, road transport, insurance business, accounting and audit, other commercial services, and concurrently four entries are reduced by integration.