Negative List for the Access of Foreign Investment in the Pilot Free Trade Zones (2017)

 2018-05-04  1276


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List) for the Access of Foreign Investment in the Pilot Free Trade Zones issued on April 8, 2015 shall be concurrently repealed.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)


S/N

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) It is prohibited for foreign investors to invest in the breeding of transgenic varieties of agricultural crops, breeding livestock and poultry, and aquatic seedling and the production of their transgenic seeds (seedlings).
(3) The breeding of new varieties of agricultural crops and the production of seeds shall be controlled by the Chinese parties.
(4) It shall be prohibited to collect germplasm resources of agricultural crops without approval.

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.
(9) It is prohibited for foreign investors to invest in the exploration and exploitation of tungsten, molybdenum, tin, antimony and fluorite.
(10) It is prohibited for foreign investors to invest in the exploration, exploitation, and beneficiation of radioactive minerals.

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.
(17) The smelting and separation of rare earth shall be carried out by means of joint venture and cooperation.
(18) It is prohibited for foreign investors to invest in the smelting and processing of radioactive minerals.

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.
(21) Only state-owned enterprises or state-owned holding enterprises of China may engage in the disposal of solid radioactive wastes.

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.
(25) The construction and operation of power grids 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.
(27) The central reserve grains (oil) shall be subject to monopolization. China Grain Reserves Corporation shall be responsible for the purchase, storage, business operation, and management of central reserve grains (oil).
(28) The sale of duty-free goods shall be subject to franchising and centralized and unified management.
(29) The issuance and sale of lotteries shall be subject to franchising and it is not allowed to issue or sell overseas lotteries within the territory of the People's Republic of China.

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.
(31) Railway passenger transport companies 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.
(33) Waterway transport operators shall not use foreign vessels to engage in China's domestic waterway transport business. However, under the circumstance where there is no Chinese vessel that may satisfy the requirements for the applied transport, and the berthing port or water areas for the vessel is an open port or water areas, the water transport operator may, with the approval of the Chinese government and within the prescribed time limit and voyage number as prescribed by the Chinese government, temporarily use a foreign vessel to provide maritime transport and towing services between Chinese ports.
(34) The foreign investment ratio of any international or domestic shipping agency shall not exceed 51%.

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.
(38) The construction and operation of civil airports shall be relatively controlled by the Chinese parties.

23.

Postal industry

(39) It is prohibited for foreign investors to invest in postal enterprises or operate postal services.
(40) It is prohibited for foreign investors to invest or engage in China's domestic express delivery of letters.

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).
(43) It is prohibited for foreign investors to engage in activities of Internet map compilation and publishing (except those under China's commitment to opening up to the outside world in its entry into the WTO).
(44) The cooperation between an Internet news information service entity and a foreign investor concerning Internet news information services shall be reported to the Chinese government for security review.

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:
(a) the shareholder of a wholly-foreign-funded bank or the foreign shareholder of a Sino-foreign joint venture bank shall be a financial institution and the sole or controlling/principal foreign shareholder shall be a commercial bank;
(b) the investor of a Chinese-funded commercial bank or trust company shall be a financial institution;
(c) the investor of a rural commercial bank, rural cooperative bank, rural credit (cooperative) union, or village bank shall be a foreign bank;
(d) the investor of a financial leasing company shall be a financial institution or a financial leasing company;
(e) the principal contributor of a consumer finance company shall be a financial institution;
(f) the investor of a currency brokerage firm shall be a currency brokerage firm;
(g) the investor of a financial assets management company shall be a financial institution and such investor shall not be a promoter in the establishment of the financial assets management company; and
(h) the investor shall be a financial institution where it is not explicitly stipulated in any law or regulation.
(46) To invest in a banking financial institution, a foreign investor shall satisfy the requirements for a certain amount of total assets, to be specific:
(a) a foreign investor obtaining controlling interests in a bank and a foreign investor making investment in a Chinese-funded commercial bank, rural commercial bank, rural cooperative bank, village bank, loan company or any other bank shall have no less than USD 10 billion of total assets at the end of the year before its application is filed;
(b) a foreign investor making investment in a rural credit (cooperative) union or a trust company shall have no less than USD 1 billion of total assets at the end of the year before its application is filed;
(c) a foreign bank planning to establish a branch shall have no less than USD 20 billion of total assets at the end of the year before its application is filed;
(d) a financial leasing company with independent legal person registered outside China shall have no less than RMB 10 billion of year-end total assets or equivalent convertible currency in the most recent year;
(e) Foreign investors of other banking financial institutions to which the laws and regulations have not explicitly stated to be inapplicable shall have no less than USD 1 billion of year-end total assets one year before their applications are filed.
(47) To invest in a currency brokerage firm, a foreign investor shall have been carrying out the currency brokerage business for over 20 years and meet such specific requirements as the global agency network and information communication network required for providing currency brokerage services.
(48) The proportion of the shares held in a single Chinese-funded commercial bank, rural commercial bank, rural cooperative bank, rural credit (cooperative) union, financial assets management company and any other banking financial institutions by a single overseas financial institution and all affiliated parties controlled by it alone or jointly, as a promoter or a strategic investor, shall not exceed 20%, and the proportion of the total shares held in a single Chinese-funded commercial bank, rural commercial bank, rural cooperative bank, rural credit (cooperative) union, financial assets management company and any other banking financial institutions by two or more overseas financial institutions and all affiliated parties controlled by each of them alone or jointly, as a promoter or a strategic investor, shall not exceed 25%.
(49) In addition to the requirements for the type and qualification of an institutional shareholder, a foreign bank shall also meet the following requirements:
(a) a foreign bank shall not serve as an agent in such business as “handling receipts and payments on a commission basis,” and “conducting the bank card business” as described in the Law of the People's Republic of China on Commercial Banks, and a foreign bank branch shall not provide RMB business to Chinese residents except that it may absorb fixed-term deposits of no less than 1 million yuan per transaction from Chinese residents;
(b) no less than RMB 200 million of working capital or an equivalent of freely convertible currency of a foreign bank branch shall be allocated by the head office free of charge, 30% of the working capital shall exist in the form of designated interest-bearing assets, and the interest-earning assets which exist in the form of time deposits shall be deposited in 3 Chinese-funded commercial banks or less within the territory of China; and
(c) the ratio between the RMB portion of the sum of the working capital and reserves, and the RMB risk assets of a branch of a foreign bank shall not be less than 8%.

27.

Capital market services

(50) The proportion of foreign capital in a futures company shall not exceed 49%.
(51) The proportion of foreign capital in a securities company shall not exceed 49%.
(52) The proportion of shares of a listed Chinese-funded securities company held (including directly held and indirectly controlled) by a single foreign investor may not exceed 20%; and the proportion of shares of the listed Chinese-funded securities company held (including directly held and indirectly controlled) by all foreign investors may not exceed 25%.
(53) The proportion of foreign capital in a securities investment and fund management company shall not exceed 49%.
(54) No foreign investor may become an ordinary member of a securities exchange or a member of a futures exchange.
(55) Except as otherwise prescribed by the Chinese government, no foreign investor may apply for opening an A-share securities account or a futures account.

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%.
(57) Where investment in the equities of an insurance company is made and all foreign shareholders' investment or equity held in the company accounts for less than 25% of the registered capital of the company, all foreign shareholders shall be overseas financial institutions (except those who purchase the stock shares of the insurance company through the exchanges), and the total year-end assets in the year before an application is filed shall not be less than USD 2 billion.
To apply for forming a foreign-funded insurance company, a foreign insurance company shall meet the following conditions:
(a) It has been conducting the insurance business for 30 years or more.
(b) Two years or more has elapsed since the formation of its representative office within the territory of China.
(c) Its total assets at the end of the year before its application for the formation is filed were not less than USD 5 billion.

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.
(59) It is prohibited for foreign investors to handle China's legal affairs or become a partner of a domestic law firm in China.
(60) The representative office of a foreign law firm in China may not recruit a Chinese practicing lawyer and the auxiliary personnel it recruits may not provide legal services to its clients.

30.

Consulting and survey

(61) It is prohibited for foreign investors to invest in social surveys.
(62) Market surveys are subject to joint venture and cooperation. In particular, surveys of radio and television ratings shall be controlled by the Chinese parties.

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.
(64) Surveying companies shall be controlled by the Chinese parties.
(65) It is prohibited for foreign investors to invest in the development and application of technologies for diagnosis and treatment of human stem cells and genes.
(66) It is prohibited for foreign investors to establish and operate research institutes of humanities and social sciences.

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.
(68) It is prohibited for foreign investors to collect or purchase wildlife or microorganism resources under national key 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).
(70) A foreign educational institution may, by cooperating with a Chinese educational institution, establish an educational institution whose primary purpose is to enroll Chinese citizens, and Chinese and foreign cooperators may establish various educational institutions at all levels by cooperation; however,
(a) they shall not establish educational institutions providing compulsory education;
(b) no foreign religious organization, religious institution, religious academy, or religious personnel may carry out cooperative education activities within the territory of China; no Sino-foreign cooperative educational institution may engage in religious education or carry out religious activities; and no investment may be made in religious education institutions within the territory of China; and
(c) regular senior secondary schools, institutions of higher education, and preschool educational institutions shall be led by the Chinese parties (the president or principal administrator of such schools shall be a Chinese citizen and live in China; the Chinese personnel in the board of governors, the board of directors, or the joint management committee shall not be less than 1/2; and the educational activities and course materials shall abide by the corresponding laws and regulations of China and the relevant provisions).

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.
(73) It is prohibited for foreign investors to invest in companies that produce and operate radio and television programs.
(74) The landing of overseas satellite channels shall be subject to approval. The investment in film and the introduction of radio and television programs shall be prohibited. To introduce a foreign television drama and any other foreign TV programs by means of satellite transmission, the entity designated by the State Administration of Press, Publication, Radio, Film and Television of China shall make a declaration.
(75) The television dramas (including television cartoon programs) that are co-produced by China and a foreign country shall be subject to licensing management.

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.
(77) To establish a permanent news agency or to dispatch resident correspondents in China, a foreign news organization shall obtain the approval of the Chinese government.
(78) To provide news services within the territory of China, a foreign news agency shall be subject to the approval of the Chinese government.
(79) It is prohibited for foreign investors to invest in or operate the editing, publication or production of books, newspapers, periodicals, audio-visual products or electronic journals; and it is prohibited for foreign investors to operate the layouts of newspapers or periodicals. However, with the approval of the Chinese government, under the premise of ensuring the decision-making power in business operation and the power of final adjudication of the contents and meeting other conditions for the approval of the Chinese government, the Chinese and foreign publishing houses may carry out Sino-foreign cooperation projects of press and publication.
(80) Business cooperation between Chinese and foreign news agencies shall be led by the Chinese parties and shall be subject to the approval of the Chinese government.
(81) The printing of publications shall be controlled by the Chinese parties.
(82) Without the approval of the Chinese government, it is prohibited for foreign investors to provide financial information services within the territory of China.
(83) Foreign media (including newspaper offices, periodical presses, book publishers, audio and video publishers, publishing companies of electronic publications as well as such mass media organizations as broadcasting, film, and television in foreign countries, Hong Kong, Macao, and Taiwan) may not establish an agency or editorial department within the territory of China. Without the approval of the Chinese government, no office shall be set up and an office may only provide liaison, communication, consulting and reception services.

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.
(85) The construction and operation of cinemas shall be controlled by the Chinese parties. The showing of a film shall comply with the proportions of show time of Chinese films and imported films as prescribed by the Chinese government. The annual show time of Chinese films in a film showing entity may not be lower than 2/3 of the annual show time of all 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.
(87) It is prohibited for foreign investors to invest in and operate China's state-owned cultural relics museums.
(88) It is not allowed to transfer, mortgage, or lease immovable cultural relics and cultural relics that are not allowed to exit China to foreigners.
(89) It is prohibited for foreign investors to establish and operate any intangible cultural heritage investigation agency.
(90) Where a foreign organization or individual conducts investigation and archaeological survey, exploration, and unearthing of intangible cultural heritage, such foreign organization or individual shall cooperate with a Chinese party and shall obtain the special approval and license.

39.

Culture and entertainment

(91) It is prohibited for foreign investors to establish performing arts groups.
(92) Performance agencies shall be controlled by the Chinese parties (except those providing services in the provinces or cities with free trade zones).

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.
(94) For projects that are not allowed in the Catalogue for the Guidance of Foreign Investment Industries and projects that are marked with “subject to joint venture,” “subject to cooperation,” “subject joint venture and cooperation,” “controlled by the Chinese parties,” “relatively controlled by the Chinese parties” and that have specific requirements for the proportion of foreign capital, no foreign-funded partnership enterprise may be established.
(95) Where a domestic company, enterprise or natural person merges and acquires a domestic company that has affiliation relationship therewith in the name of a company lawfully formed or controlled thereby overseas, and involves a foreign-invested project and matters concerning the enterprise establishment and change, it shall be governed by the provisions in force.


Measures of the Special Management Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (2017) Reduced from the Previous Edition


Category

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.

 

 


____________________ 

*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.