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Q&A Regarding the Special Administrative Measures for the Access of Foreign Investment (Negative List) 2020 Edition

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Special Administrative Measures for the Access of Foreign Investment (Negative List) 2020 Edition will come into effect on July 23, 2020, and the Negative List 2019 Edition will be abolished at the same time. Compared to the Negative List 2019 Edition, what is the change? This article aims to solve frequently asked questions in the form of Q&A for clients’ reference.

Q:
Compared to the Negative List 2019 Edition, How much has the 2020 negative list been reduced?
A:
1.
The restriction items on the nationwide Negative List for the Access of Foreign Investment have been reduced from 40 to 33;
2. The restriction items on the Negative List for the Access of Foreign Investment of Pilot Free Trade Zones have been reduced from 37 to 30.

Q:
What areas will open to the service industry according to the Negative List 2020 Edition?
A:
1.
In the financial sector, restrictions on foreign shareholding in securities companies, securities investment fund management companies, futures companies and life insurance firms have been lifted;
2. In the infrastructure sector, the provisions that the construction and operation of water supply and drainage pipeline networks in cities with a population of more than 500,000 must be controlled by Chinese investors have been removed;
3. In the transportation sector, the provisions prohibiting foreign investment in air traffic control have been cancelled, and the regulations on civil airport entries have been adjusted;
4. In the Leasing and business service sector, regulations that market research is limited to cooperation have been abolished;
5. In the health and social work sector, regulations restricting medical institutions to cooperation have been cancelled;
6. In the scientific research and technology service sector, foreign-invested mining holders carrying out scientific research within the scope of their mining rights will not be restricted by special administrative measures.

Q:
What areas will be relaxed in manufacturing and agricultural sectors according to the Negative List 2020 Edition?
A:
1.
In the manufacturing sector, the restrictions on the shareholding of foreign investment in commercial vehicle manufacturing are relaxed; the regulations prohibiting foreign investment in the smelting, processing and nuclear fuel production of radioactive minerals are eliminated;
2. In the agricultural sector, the regulations that the selection of new wheat varieties and the production of seeds must be controlled by Chinese investors have been adjusted to that the percentage of shareholding of Chinese investors must be not less than 34%.

Q:
Which projects will be opened in Pilot Free Trade Zones according to the Negative List 2020 Edition?
A:
On the basis of the national opening-up measures, the Pilot Free Trade Zones will continue to take the lead.
1.
In the medicine sector, the prohibition of foreign investments in Chinese medicine have been removed;
2. In the education sector, wholly foreign-owned vocational education institution is allowed to be established.

Q:
Are there any requirements on foreign investment in the areas not included in the Negative List?
A:
Same administration measures will be adopted for both foreign invested and China domestic invested enterprises in the areas not covered by the Negative List.

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