China’s 2022 Negative List

On December 27, 2021, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) jointly issued the updated versions of two “negative lists”, both of which will take effect on January 1, 2022. This is a move to further open China’s markets to foreign investors and promote high-quality economic development.


This marks the fifth consecutive year that the world's second largest economy has revised its national negative list and pilot free trade zone (FTZ) negative list.


The number of items that are off-limits for foreign investors will be cut to 31 in the 2021 version of the national negative list from 33 in the 2020 version.


The number of items on the pilot FTZ negative list will be reduced to 27 from 30 in the 2020 version.


Further opening up of manufacturing sector

The new negative lists further liberalize restrictions on foreign ownership in the field of auto manufacturing.


The cap on the share ratio of foreign investment in passenger car production and the rule that prevents a foreign investor from establishing more than two joint ventures to produce the same types of vehicles in China has been relaxed.


Furthermore, all manufacturing sectors will be open to foreign investors in the pilot FTZs.


Further easing of service sectors in the FTZs

Foreign investors' access to the service sector in pilot FTZs will also be widened. Foreign investment will be allowed in the social survey industry, but ownership by foreign investors should be no more than 33 percent and the legal representatives should have Chinese nationality.


For those industries that are not included in the negative lists, foreign-invested enterprises should be given national treatment.


China has continued to open up and facilitate the entry of foreigners to the country, as well as improve its business environment. Foreign investors have access to a wider range of sectors than ever.


Meanwhile, a number of major opening-up measures have been introduced in industries including finance and automobiles, creating broader room for foreign investment.


Despite a sharp decline in global cross-border investment, China maintains its status as one of the top FDI destination.


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