President Xi Jinping’s pledge at the G20 to further open the country’s economy to foreign investment was followed up over the weekend by the relevant central government departments. The Special Management Measures for Foreign Investment Access, a.k.a. the “Negative List”, was cut from 48 to 40. Whoops of delight will likely be forthcoming from companies involved in: shipping, town gas, cinemas, brokerages, telecoms, oil and gas exploration, which have been fully opened to foreign investment, starting July 30. At the same time, restricted industries within the country’s Free Trade Zones were also reduced, from 45 to 37.
Moreover, access has been further relaxed in other ways, especially in agriculture, mining, and manufacturing. For example, in the agricultural sector, foreign investment in wildlife resources is now open, while in the mining industry, oil and gas exploration and development no longer needs to go through joint ventures, while certain minerals such as molybdenum, tin, antimony and fluorite, which were previously off-limits, are now open. In the manufacturing sector, rice paper and ink ingot production are now open.
Industry experts said that it was the first time to cancel the Chinese holding restrictions in fields related to transportation, infrastructure, culture and entertainment. They also noted that the revisions come despite China being a standout in international flows of foreign direct investment. In the first five months, the country saw an FDI inflow of US$54.6 billion, up 3.7 percent YoY.