Negative lists for foreign investment access

The Special Administrative Measures for Foreign Investment Access (Negative List) is an important policy for China to explore in depth the implementation of the Negative List Management System of Pre-entry National Treatment for Foreign Investment and to continuously improve the level of opening-up, with the aim of implementing comprehensive opening-up in a wider scope, broader fields and at a deeper level, and to promote high-quality development of the economy.

The Negative List (2021 Edition) has been reduced to 31 areas, further deepening the opening-up of the manufacturing industry.

In the field of automobile manufacturing, the restriction on the ratio of foreign shares in the manufacture of passenger cars and the restriction that the same foreign investor may establish two or less joint ventures in the country to manufacture the same type of vehicle products have been abolished.

In the field of radio and television equipment manufacturing, removing restrictions on foreign investment in the production of satellite television broadcasting ground receiving facilities and key components.

The Negative List in Pilot Free Trade Zones (2021 Edition) has been reduced to 27 areas, with manufacturing areas zeroed out for the first time, and opening-up in service industry.

Abolish the restrictions on the ratio of foreign shares in the manufacture of passenger cars and the restriction that the same foreign investor may establish two or fewer joint ventures in the country to produce the same type of vehicle products.

Removal of restrictions on foreign investment in the production of satellite television broadcasting ground receiving facilities and key components.

Allow foreign investment in social surveys but require that the Chinese party's shareholding is not less than 67 percent, and the legal representative should have Chinese nationality.

In the field of market research, except for radio and television listening and viewing surveys, which must be controlled by the Chinese side, the restrictions on foreign investment are canceled.

Full text：

Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Edition)

I. The Special Administrative Measures (Negative List) for Foreign Investment Access (hereinafter referred to as Negative List for Foreign Investment Access) sets out on a unified basis the special administrative measures regarding equity and senior management personnel requirements for the access of foreign investment. Sectors not covered in the Negative List for Foreign Investment Access shall be subject to administration in accordance with the principle of equal treatment for domestic and foreign investments. The relevant provisions of the Negative List for Market Access shall apply to both domestic and foreign investors.

II. No overseas investor may engage in investment and business activities as an individual entrepreneur, an investor in sole proprietorships, or a member of farmers' professional cooperatives.

III. Foreign-invested enterprises in China shall comply with the relevant provisions of the Negative List for Foreign Investment Access.

IV. In the course of performing their duties in accordance with the law, the relevant competent authorities shall refuse to handle license applications, business registration, or any other related matter for overseas investors intending to invest in sectors covered by the Negative List for Foreign Investment Access but not in compliance with its provisions, and refuse to handle the relevant approval matters if the approval involves fixed-asset investment projects. Overseas investors shall not establish foreign-invested partnerships when investing in sectors with equity requirements.

V. Upon review by the relevant competent departments of the State Council and approval by the State Council, the provisions of the Negative List for Foreign Investment Access on the relevant fields may not apply to specific foreign investments.

VI. Domestic enterprise engaged in businesses in field prohibited from investment mentioned in the Negative List for Foreign Investment Access shall be examined and approved by the relevant competent authorities of the state for issuing shares abroad and going public for trading; Overseas investor shall not participate in the operation and management of the enterprise, and its shareholding ratio shall be governed with reference to the relevant provisions on the management of domestic securities investment by overseas investors.

VII. Where domestic companies, enterprises or natural persons merge or acquire their affiliated domestic companies through a company legally established or controlled overseas thereby, the relevant provisions on foreign investment, overseas investment, foreign exchange administration, etc. shall apply.

VIII. Measures concerning administrative examination and approval, qualification requirements, and national security in sectors such as culture and finance, not included in the Negative List for Foreign Investment Access, shall be governed in accordance with existing provisions.

IX. Where the Mainland and Hong Kong Closer Economic Partnership Arrangement and its follow-up agreements, the Mainland and Macao Closer Economic Partnership Arrangement and its follow-up agreements, the Cross-Straits Economic Cooperation Framework Agreement and its follow-up agreements, and any international convention or treaty to which China is a contracting state or has acceded, set out more preferential provisions on treatment of access for overseas investors, those provisions shall prevail. Where more preferential opening-up measures are offered to eligible investors in special economic zones, such as pilot free trade zones, those relevant provisions shall prevail.

X. The Negative List for Foreign Investment Access shall be interpreted by the National Development and Reform Commission and the Ministry of Commerce in concert with the relevant authorities.

XI. The Special Administrative Measures (Negative List) for Foreign Investment Access (2020 Edition) issued by the National Development and Reform Commission and the Ministry of Commerce on June 23, 2020, will be repealed as of January 1, 2022.

Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Edition)
S/N	Special Administrative Measures
I. Agriculture, Forestry, Animal Husbandry, and Fishery
1	The Chinese investors shall hold no less than 34% of shares concerning the selection and breeding of new varieties and production of wheat seeds. For the selection and breeding of new varieties and production of corn seeds, the Chinese investors shall have a controlling stake.
2	Investment in the research and development,cultivation, and plantation of rare and unique precious and superior varieties in China, as well as the production of related propagative materials (including valuable genes in planting, animal husbandry, and aquaculture), shall be prohibited.
3	Investment in selecting and breeding genetically modified varieties of crops, as well as livestock, poultry, and aquatic breeds, in addition to the production of such genetically modified seeds (seedlings), shall be prohibited.
4	Investment in fishing of aquatic products in marine areas under Chinese jurisdiction and within Chinese territorial waters shall be prohibited.
II. Mining
5	Investment in the exploration, mining, and beneficiation of rare earths, radioactive materials, and tungsten shall be prohibited.
III. Manufacturing
6	For the printing of publications, Chinese investors must have a controlling interest.
7	Investing in the application of steaming, stir-frying, moxibustion, calcination of Chinese herbal medicines and other processing techniques as well as the production of confidential prescription products of proprietary Chinese medicines shall be prohibited.
IV. Production and Supply of Electricity, Heat, Gas, and Water
8	The construction and operation of nuclear power plants must be controlled by Chinese investors.
V. Wholesale and Retail
9	Investment in the wholesale and retail of tobacco, cigarettes, re-dried leaf tobacco, and other tobacco products shall be prohibited.
VI. Transportation, Warehousing, and Post Services
10	Domestic water transport companies must be controlled by Chinese investors.
11	Public air transport companies must be controlled by Chinese investors, and the proportion of investment by a foreign investor and its affiliates 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. General aviation companies serving the agriculture, forestry, and fishery industries shall be limited to joint ventures, and the controlling stake in other types of general aviation companies shall be held by Chinese investors.
12	Chinese investors must have a relative controlling interest in the construction and operation of civil airports. Foreign investors may not participate in either the construction or operation of air traffic control towers.
13	Investment in postal companies and domestic express mail delivery shall be prohibited.
VII. Information Transmission, Software, and Information Technology Services
14	Telecommunications companies: Foreign investors shall be limited to telecommunications services opened up pursuant to China's WTO commitments. The shareholding ratio for foreign investment in value-added telecommunications services (except for e-commerce, domestic multi-party communications, store-and-forward, and call centers) shall not exceed 50%. Basic telecommunications business must be controlled by Chinese investors.
15	Investment in Internet news and information services, Internet publishing services, Internet audio-visual program services, cyber culture operation (with the exception of music), and Internet public information services (with the exception of content which has been opened up pursuant to China's WTO commitments) shall be prohibited.
VIII. Leasing and Business Services
16	Investment in Chinese legal services shall be prohibited (with the exception of providing information regarding the impact of Chinese legal environment). No foreign investor may become a partner in a Chinese law firm.
17	Market surveys shall be limited to joint ventures, and radio and television ratings surveys must be controlled by Chinese investors.
18	Investment in social survey services shall be prohibited.
IX. Scientific Research and Technical Services
19	Investment in the development and application of human stem cells, as well as genetic diagnosis and treatment technology, shall be prohibited.
20	Investment in humanities and social sciences research institutes shall be prohibited.
21	Investment in the following areas shall be prohibited: Geodetic surveying, ocean mapping, aerial imaging and mapping, ground motion measurement, administrative boundary mapping, compilation of topographic maps, maps of world administrative regions, maps of Chinese administrative regions, administrative maps at the provincial level and below, nationwide teaching maps, local teaching maps, real 3-D maps, electronic navigational charts, and regional geological mapping, mineral geological surveys, geophysical and geochemical surveys, and studies of hydrogeology, environmental geology, geological disasters, and remote sensing geology (those holding mining rights shall not be subject to this special administrative measure and shall be free to work within the scope of their mining rights).
X. Education
22	Pre-school education institutions, regular upper secondary schools, and higher education institutions shall be limited in form to Chinese-foreign cooperative schools, which must be dominated by Chinese investors (the principal or main administrative head should be of Chinese nationality, while no less than half of the board of governors, board of directors, and joint administrative committee shall be Chinese members).
23	Investment in compulsory education institutions and religious education institutions shall be prohibited.
XI. Health and Social Work
24	Investment in medical institutions shall be limited to the form of joint ventures.
XII. Culture, Sports, and Entertainment
25	Investment in news organizations (including but not limited to news agencies) shall be prohibited.
26	Investment in the editing, publication, and production of books, newspapers, periodicals, audio-video products, and electronic publications shall be prohibited.
27	Investment in the establishment and operation of all levels of radio stations, television stations, radio and television channels (frequencies), and radio and television transmission coverage networks (including transmitters, relay stations, radio and television satellites, satellite up-link stations, satellite transmission stations, microwave relay stations, monitoring stations, as well as cable radio and television transmission coverage networks) shall be prohibited. The provision of on-demand radio and television video services and the installation of satellite television broadcast ground receiving facilities shall be prohibited.
28	Investment in radio and television program production and operation (including importation) enterprises shall be prohibited.
29	Investment in movie production companies, distribution companies, cinema operators, and movie importation business, shall be prohibited.
30	Investment in auction companies engaged in cultural relic auctions, cultural artifact stores, and state-owned museums that house cultural relics shall be prohibited.
31	Investment in art performance groups shall be prohibited.

Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (2021 Edition)

I. The Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (hereinafter referred to as the Negative List in Pilot Free Trade Zones) sets out on a unified basis the special administrative measures regarding equity and senior management personnel requirements for the access of foreign investment applicable to pilot free trade zones. Sectors not covered in the Negative List in Pilot Free Trade Zones shall be subject to administration in accordance with the principle of equal treatment for domestic and foreign investments. The relevant provisions of the Negative List for Market Access shall apply to both domestic and foreign investors.

II. No overseas investors may engage in investment activities as an individual entrepreneur, an investor of sole proprietorships, or a member of farmers' professional cooperatives.

III. Foreign-invested enterprises in China shall comply with the relevant provisions of the Negative List in Pilot Free Trade Zones.

IV. In the course of performing their duties in accordance with the law, the relevant competent authorities shall refuse to handle license applications, business registration or any other related matter for any overseas investor intending to invest in a sector covered in the Negative List in Pilot Free Trade Zones but not in compliance with the provisions of the Negative List in Pilot Free Trade Zones, and refuse to handle the relevant approval matters if the approval involves any fixed-asset investment projects. Overseas investors shalll not establish foreign-invested partnerships when investing in sectors with equity requirements.

V. Upon review by the relevant competent departments of the State Council and approval by the State Council, the provisions of the Negative List in Pilot Free Trade Zones on the relevant fields may not apply to specific foreign investments.

VI. Domestic enterprises engaged in a business in a field prohibited for investment mentioned in the Negative List in Pilot Free Trade Zones shall be examined and approved by the relevant competent authorities of the state for issuing shares abroad and going public for trading；Overseas investors shall not participate in the operation and management of the enterprise, and its shareholding ratio shall be governed with reference to the relevant provisions on the management of domestic securities investment by foreign investors.

VIII. Measures concerning administrative examination and approval, qualification requirements, and national security in sectors such as culture and finance, not included in the Negative List in Pilot Free Trade Zones, shall be governed in accordance with existing provisions.

X. The Negative List in Pilot Free Trade Zones shall be interpreted by the National Development and Reform Commission and the Ministry of Commerce in concert with the relevant authorities.

XI. The Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (2020 Edition) issued by the National Development and Reform Commission and the Ministry of Commerce on June 23, 2020, will be repealed as of January 1, 2022.

Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (2021 Edition)
S/N	Special Administrative Measures
I. Agriculture, Forestry, Animal Husbandry, and Fishery
1	The Chinese investor shall hold no less than 34% of shared concerning the selection and breeding of new varieties and production of wheat and corn seeds.
2	Investment in the research and development, cultivation, and plantation of rare and unique precious and superior varieties in China, as well as the production of related propagative materials (including valuable genes in planting, animal husbandry, and aquaculture), shall be prohibited.
3	Investment in selecting and breeding genetically modified varieties of crops, as well as livestocks, poultry, and aquatic breeds, in addition to the production of such genetically modified seeds (seedlings), shall be prohibited.
II. Mining
4	Investment in the exploration, mining, and beneficiation of rare earths, radioactive materials, and tungsten shall be prohibited. (No foreign investors shall be allowed to enter rare earth mining areas or obtain mine geological information, production processes and technology, and ore samples unless otherwise permitted.)
III. Production and Supply of Electricity, Heat, Gas, and Water
5	The construction and operation of nuclear power plants must be controlled by Chinese investors.
IV. Wholesale and Retail
6	Investment in the wholesale and retail of tobacco, cigarettes, re-dried leaf tobacco, and other tobacco products shall be prohibited.
V. Transportation, Warehousing, and Post Services
7	Domestic water transport companies must be controlled by Chinese investors. (Foreign investors are forbidden from operating domestic waterway transport businesses or carrying out indirect activities through the operation or chartering of Chinese vessels or shipping space. Waterway transport operators may not employ foreign vessels to carry out domestic waterway transport business operations. However, upon the approval of the Chinese government, in the absence of Chinese vessels on location capable of meeting transport requirements, and in the event the port or body of water in which the vessel is docked has been opened to foreign vessels, the waterway transport business operator may, within the limits of the period or voyage specified by the Chinese government, temporarily employ foreign vessels to carry out marine transport or towing between Chinese ports.)
8	Public air transport companies must be controlled by Chinese investors, and the proportion of investment by a foreign investor and its affiliates 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. General aviation companies serving the agriculture, forestry, and fishery industries shall be limited to joint ventures, and the controlling stake in other types of general aviation companies shall be held by Chinese investors. (Only Chinese public air carriers may operate domestic air services and provide scheduled and unscheduled international air services as designated carriers in China.)
9	Chinese investors must have a relatively controlling interest in the construction and operation of civil airports. Foreign investors may not participate in either the construction or operation of air traffic control towers.
10	Investment in postal companies (and operation of postal services) and domestic express mail delivery shall be prohibited.
VI. Information Transmission, Software, and Information Technology Services
11	Telecommunications companies: Foreign investors are limited to telecommunications services opened up pursuant to China's WTO commitments. The share holding ratio for foreign investment in value-added telecommunications services (except for e-commerce, domestic multi-party communications, store-and-forward, and call centers) shall not exceed 50%.Basic telecommunications business must be controlled by Chinese investors (the operator must also be a legally established company specializing in basic telecommunications services). The pilot policies covering the original area (28.8 square kilometers) of the China (Shanghai) Pilot Free Trade Zone shall be applied to all pilot free trade zones.
12	Investment in Internet news and information services, Internet publishing services, Internet audio-visual program services, cyber culture operation (with the exception of music), and Internet public information services (with the exception of content which has been opened up pursuant to China's WTO commitments) shall be prohibited.
VII. Leasing and Business Services
13	Investment in Chinese legal services shall be prohibited (with the exception of providing information regarding the impact of Chinese legal environment). No foreign investor may become a partner in a Chinese law firm. (Foreign law firms may only enter China in the form of representative offices and may not employ practicing lawyers who are Chinese citizens. The supporting staff employed by the representative office may not provide clients with legal services. Permission must be received from Chinese judicial authorities for the establishment of a representative office in China or the dispatch of representatives.)
14	Radio and television ratings surveys must be controlled by Chinese investors. The Chinese investors must hold no less than 67% of the shares regarding social survey businesses, and the legal representative must be a Chinese national.
VIII. Scientific Research and Technical Services
15	Investment in the development and application of human stem cells, as well as genetic diagnosis and treatment technology, shall be prohibited.
16	Investment in humanities and social sciences research institutes shall be prohibited.
17	Investment in the following areas shall be prohibited: Geodetic surveying, ocean mapping, aerial imaging and mapping, ground motion measurement, administrative boundary mapping, compilation of topographic maps, maps of world administrative regions, maps of Chinese administrative regions, administrative maps at the provincial level and below, nationwide teaching maps, local teaching maps, real 3-D maps, electronic navigational charts, and regional geological mapping, mineral geological surveys, geophysical and geochemical surveys, and studies of hydrogeology, environmental geology, geological disasters, and remote sensing geology (those holding mining rights shall not be subject to this special administrative measure and shall be free to work within the scope of their mining rights).
IX. Education
18	Pre-school education institutions, regular upper secondary schools, and higher education institutions shall be limited in form to Chinese-foreign cooperative schools, which must be dominated by Chinese investors (the principal or main administrative head should be of Chinese nationality, and reside in China. No less than half of the Council, board of directors, or joint administrative committee shall be Chinese members). (Foreign educational institutions and other organizations or individuals shall not solely establish schools or any other educational institutions whose enrollment targets are primarily Chinese citizens, excluding non-academic vocational training institutions, and academic vocational education institutions. However, foreign educational institutions may cooperate with a Chinese educational institution to jointly establish educational institutions mainly targeting Chinese citizens.)
19	Investment in compulsory education institutions and religious education institutions shall be prohibited.
X. Health and Social Work
20	Investment in medical institutions shall be limited to the form of joint ventures.
XI. Culture, Sports, and Entertainment
21	Investment in news organizations (including but not limited to news agencies) shall be prohibited. (The establishment of resident news outlets in China and the dispatch of resident correspondents to China by foreign news organizations shall be subject to approval by the Chinese government. Provision of news services by foreign news agencies in China shall be subject to review and approval by the Chinese government. Business cooperation between Chinese and foreign news organizations must be dominated by the Chinese side and approved by the Chinese government.)
22	Investment in the editing, publication, and production of books, newspapers, periodicals, audio-video products, and electronic publications shall be prohibited. (However, subject to the approval of the Chinese government, and provided that the cooperating Chinese side dominates the operation and has the right to the final review of content, and that the parties also satisfy all other conditions as approved by the Chinese government, the Chinese and foreign publishers may engage in news publishing projects jointly. The provision of financial information services in China without the approval of the Chinese government shall be prohibited.)
23	Investment in the establishment and operation of all levels of radio stations, television stations, radio and television channels (frequencies), and radio and television transmission coverage networks (including transmitters, relay stations, radio and television satellites, satellite up-link stations, satellite transmission stations, microwave relay stations, monitoring stations, as well as cable radio and television transmission coverage networks) shall be prohibited. The provision of on-demand radio and television video services and the installation of satellite television broadcast ground receiving facilities shall be prohibited. (The landing of overseas satellite channels shall be subject to examination and approval.)
24	Investment in radio and television program production and operation (including importation) enterprises shall be prohibited. (The importation of overseas movies, television dramas, and of other overseas television programs via satellite transmission shall be applied by organizations designated by the National Radio and Television Administration. A licensing system shall be applied to television series (including TV animations) produced as a result of Chinese-foreign cooperation.)
25	Investment in movie production companies, distribution companies, cinema operators, and movie importation business, shall be prohibited. (However, upon approval, foreign enterprises may be allowed to produce movies jointly with Chinese enterprises.)
26	Investment in auction companies engaged in cultural relic auctions, cultural artifact stores, and state-owned museums that house cultural relics shall be prohibited. (Immovable cultural relics and cultural relics that may not be removed from the country shall not be transferred, mortgaged or leased to foreigners. The establishment and operation of organizations involved in the investigation of intangible cultural heritage shall be prohibited. Research into intangible cultural heritage, as well as archaeological investigation, exploration, and excavation carried out in China by overseas organizations or individuals may only occur by means of cooperation with Chinese organizations and shall be subject to special examination, approval, and licensing.)
27	Performing arts groups must be controlled by Chinese investors.

Source: Overview of Foreign Investment Polices in Shanghai 2023