China Negative List of Foreign Investment Access 2020 version
Special Management Measures for Foreign Investment Access (China Negative List of Foreign Investment Access 2020 version)
Effective date: July 23, 2020 Translator: Yingxin Law Team, not official translation, for reference only
Description 1. "Special Administrative Measures for Foreign Investment Access (Negative List)" (hereinafter abbreviated as “Negative List of Foreign Investment Access”) uniformly list equity requirements, company executive requirements, and etc. Except Negative List of Foreign Investment Access, foreign investment in other areas shall be managed in accordance with the principle of consistent as domestic investment.
2. The "Negative List of Foreign Investment Access" specifies some areas with cancellation or relaxation of access restrictions transition period, that specified areas will be cancelled or relaxed on time after the transition period expires.
3. Foreign individual investor may not be the investor of Individual Household, sole proprietorship, farmers’ professional cooperatives, to carry out investments and business activities.
4. In case the foreign investor is going to invest the areas listed "Negative List of Foreign Investment Access", but not matching the requirements specified, the relevant competent authorities shall not grant the permits, accept the enterprise registration. If such investment needs fixed assets investment approval (refer to 18 projects that needs state government to approve), the state government shall not approve such investment. Foreign-invested partnership enterprises shall not be established in areas where foreign capital has equity restriction.
5. Exception: Special foreign investment project that being reviewed by the relevant competent ministry, and being approved by the State government, that special foreign investment may not company with "Negative List of Foreign Investment Access".
6. Domestic companies, enterprises or individual that use its legally established or controlled overseas companies, to merge its affiliated company in China, shall comply with the regulations of Foreign investment, overseas investment and foreign currency.
7. As to cultural, financial, and other areas that are not listed in the "Negative List of Foreign Investment Access", the relevant measures of administrative approval, qualification conditions, national security, shall be in accordance with current regulations.
8. The "Mainland and Hong Kong Arrangement on Establishing Closer Economic and Trade Relations" and subsequent Renewal Agreement, "Mainland and Macao Closer Economic and Trade Relations Arrangement" and subsequent Agreement, the "Framework Agreement on Cross-Strait Economic Cooperation" and its subsequent agreements, the international treaties and agreements that have been concluded or participated that have more favorable access treatment for foreign investors, foreign investors may choose to apply to such agreements, treaties.
If special economic zones, free trade zones in China has regulations stipulated more favorable access treatment for eligible investors, such regulations can apply to eligible foreign investors.
9. The "Negative List of Foreign Investment Access" shall be interpreted by the National Development and Reform Commission and the Ministry of Commerce, and related government department.
Special Administrative Measures for Foreign Investment Access
(China Negative List of Foreign Investment Access 2020 version)
I Agriculture, forestry, animal husbandry and fishery 1. The Chinese shareholding ratio in the selection and breeding of new wheat varieties and seed production shall not be less than 34%. The selection and breeding of new maize varieties and seed production must be controlled by the Chinese party. 2. It is forbidden to invest in the research, development, breeding, planting and production of related propagation materials of rare and unique precious and fine varieties in China (including fine genes in planting, animal husbandry, and aquaculture). 3. It is forbidden to invest in the selection and breeding of genetically modified varieties of crops, breeding livestock and poultry, aquatic seedlings and the production of genetically modified seeds (seedlings). 4. It is forbidden to invest in the fishing of aquatic products in the waters under the jurisdiction of China and inland waters.
II Mining industry 5. It is forbidden to invest in rare earth, radioactive minerals and tungsten exploration, mining and beneficiation.
III Manufacturing 6. The printing of publications must be controlled by the Chinese party. 7. It is forbidden to invest in the application of processing technologies such as steaming, frying, broiling, and calcining of Chinese herbal medicines and the production of confidential prescription products of Chinese herbal medicines. 8. Except for special vehicles, new energy vehicles, and commercial vehicles, the Chinese shareholding ratio of the entire automobile manufacturing shall not be less than 50%, and the same foreign investor can only establish two or less joint ventures in the China that produce similar vehicle. (In 2022, the restriction on the foreign shareholding ratio in car manufacturing and the restriction that the same foreign investor can only establish two or less joint ventures in the china will be lifted) 9. Satellite TV broadcasting ground receiving facilities and production of key components.
IV Electricity, heat, gas and water production and supply 10. The construction and operation of nuclear power plants must be controlled by the Chinese party.
V Wholesale and retail 11. It is forbidden to invest in the wholesale and retail of tobacco, cigarettes, redry-cured tobacco and other tobacco products.
VI Transportation, storage and postal industry 12. Domestic water transportation companies must be controlled by the Chinese party. 13. The public air transportation company must be controlled by the Chinese party, and the investment ratio of a foreign investor and its affiliated company must not exceed 25%, the legal representative must be a Chinese citizen. The legal representative of a general aviation company must be a Chinese citizen, as to aviation companies for agriculture, forestry, and fishery are limited to joint ventures, other general aviation companies shall be controlled by Chinese party. 14. The construction and operation of civil airports must be relatively controlled by the Chinese party. Foreign parties are not allowed to participate in the construction and operation of airport towers. 15. It is forbidden to invest in postal companies and domestic express delivery services for letters.
VII. Information transmission, software and information technology service industry 16. Telecommunications companies: limited to the telecommunications services committed by China's accession to the WTO, the foreign shareholding ratio of value-added telecommunications services shall not exceed 50% (except e-commerce, domestic multi-party communications, storage and forwarding, call centers), basic telecommunications services must be controlled by the Chinese party. 17. It is forbidden to invest in Internet news information services, online publishing services, online audio-visual program services, Internet cultural operations (except music), and Internet public publishing information services. (the above-mentioned services, except for content that committed by China's accession to the WTO).
VIII Leasing and business services 18. It is forbidden to invest in Chinese legal affairs (except for providing information on the impact of Chinese legal environment), and shall not to become a partner of a domestic law firm. 19. Market surveys are limited to joint ventures, in which radio and television listening and watching ratings surveys must be controlled by the Chinese party. 20. Investment in social surveys is prohibited.
IX Scientific research and technical service industry 21. It is forbidden to invest in the development and application of human stem cells, gene diagnosis and treatment technologies. 22. It is forbidden to invest in humanities and social science research institutions. 23. It is forbidden to invest in geodetic surveying, marine surveying and mapping, surveying aerial photography, ground mobile surveying, administrative region boundary surveying and mapping, topographic maps, maps of world political regions, maps of national political regions, maps of provincial and lower political regions, national teaching maps, and local teaching are prohibited Compilation of maps, true three-dimensional maps and electronic navigation maps, regional geological mapping, mineral geology, geophysics, geochemistry, hydrogeology, environmental geology, geological disasters, remote sensing geology and other surveys (mining rights holders are working within the scope of their mining rights is not restricted by this special administration measure)
X Education 24. Pre-school, ordinary high schools and higher education institutions are limited to Sino-foreign cooperative education, and must be led by Chinese party (the principal or chief administrative person shall have Chinese nationality, and the Chinese members of the council, board of directors or joint management committee shall not be less than 1/2). 25. It is forbidden to invest in compulsory education institutions and religious education institutions.
XI. Health and social work 26. Medical institutions (hospital) are limited to joint ventures.
XII Culture, Sports and Entertainment Industry 27. Investment in news organizations (including but not limited to news agencies) is prohibited. 28. It is forbidden to invest in the editing, publishing and production of books, newspapers, periodicals, audio-visual products and electronic publications. 29. It is forbidden to invest in radio stations, television stations, radio and television channel, radio and television transmission networks (transmitting stations, relay stations, radio and television satellites, satellite uplink stations, satellite receiving and transmitting stations, microwave stations, monitoring Stations and cable radio and television transmission networks, etc.), and it is prohibited from engaging in radio and television video-on-demand services and satellite television broadcasting ground receiving facilities installation services. 30. It is forbidden to invest in radio and television program production and operation (including imported business) companies. 31. It is forbidden to invest in film production companies, distribution companies, theater companies and film introduction businesses. 32. It is forbidden to invest in cultural relics auction companies, cultural relic shops and state-owned cultural relics museums. 33. Investment in cultural performance organization is prohibited.