Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Edition) Notes

Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Edition) Notes

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 (2021 Edition) issued by the National Development and Reform Commission and the Ministry of Commerce on December 27, 2021, will be repealed as of November 1, 2024.

Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Edition)

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. 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.

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.

9. 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.

10. Investment in postal companies and domestic express mail delivery shall be prohibited.

VI. Information Transmission, Software, and Information Technology Services

11. 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.

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.

14. Market surveys shall be limited to joint ventures, and radio and television ratings surveys must be controlled by Chinese investors.

15. Investment in social survey services shall be prohibited.

VIII. Scientific Research and Technical Services

16. Investment in the development and application of human stem cells, as well as genetic diagnosis and treatment technology, shall be prohibited.

17. Investment in humanities and social sciences research institutes shall be prohibited.

18. 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

19. 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).

20. Investment in compulsory education institutions and religious education institutions shall be prohibited.

X. Health and Social Work

21. Investment in medical institutions shall be limited to the form of joint ventures.

XI. Culture, Sports, and Entertainment

22. Investment in news organizations (including but not limited to news agencies) shall be prohibited.

23. Investment in the editing, publication, and production of books, newspapers, periodicals, audio-video products, and electronic publications shall be prohibited.

24. 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.

25. Investment in radio and television program production and operation (including importation) enterprises shall be prohibited.

26. Investment in movie production companies, distribution companies, cinema operators, and movie importation business, shall be prohibited.

27. Investment in auction companies engaged in cultural relic auctions, cultural artifact stores, and state-owned museums that house cultural relics shall be prohibited.

28. Investment in art performance groups shall be prohibited.