More elbow room for foreign investors in China

China decided to open its markets further for foreign investment. The liberalization, which will enter into force on July 23, 2020, concerns various industries, including finance, agriculture and fishery, manufacture, pharmaceutics, education, health and different categories of services. The number of restrictive measures has been cut down from 40 to 33. The opening-up applies also to the Pilot Free Trade Zones, where 30 restrictive measures will be in force, 7 less than before.

Here are some examples of the areas where restrictions for foreign capital will be cut back or even completely lifted.

Futures, securities and insurance: The provision that the proportion of foreign capital shall not exceed 51% has been removed.

Transportation: The prohibition of investment in air traffic control systems will be removed.

Water supply: Henceforth, foreign investment can have a controlling stake in construction and drainage network in cities of 500,000 inhabitants or more.

Chinese medicine: Foreign investment was not welcome in this sector; this provision has been removed.

The relaxation measures were decided by the National Development and Reform Commission and the Ministry of Commerce. They consist in the reduction of the restrictions or prohibitions formulated on the so-called negative lists, which enumerate the industries of limited or prohibited market access for foreign investment. In the near future, more shortenings of the negative lists can be expected.