Hu Kaihong (host):

Ladies and gentlemen, good morning. Welcome to the weekly policy briefing of the State Council. Recently, the State Council released a document mapping out plans to draft and implement a series of “negative lists” for market access and a guideline on the establishment of a multi-level medical treatment system.

We are glad today to have with us Tong Daochi, assistant minister of commerce, and Xu Shanchang, director of the economic system reform department at National Development and Reform Commission, to brief you on the background, content and highlights of the document on “negative lists” for market access. Meanwhile, we have also invited Mao Qun’an, spokesman of National Health and Family Planning Commission, to introduce the new updates of the other document and answer your questions.

First, please welcome Mr Tong.

Tong Daochi:

Thanks. Good morning, friends from the media. According to the requirement of the State Council Information Office, I will give an introduction on the document on “negative lists” for market access.

The Central Committee of the Communist Party of China (CPC) and the State Council have attached great importance to the institution of “negative lists” for market access. In November 2013, the Third Plenary Session of the 18th CPC Central Committee proposed to implement a unified market access system, and proposed, based on the “negative lists” drafted, market participants can have equal access to the fields that are not on the lists. A guideline published by the State Council in June last year, underscoring the role of fair market competition and normal market order, required to reform the market access system and draft “negative lists” for market access. It further stated, “the State Council will clearly list the industries, fields and businesses from which investments are barred or limited, and market participants can have equal access to the fields that are not on the lists according to the law.”

According to the arrangement of the CPC Central Committee and the State Council, National Development and Reform Commission, the Ministry of Commerce and other related government departments drafted the document on “negative lists” for market access (hereinafter referred to briefly as the document). After being approved on September 15, the document was published recently by the State Council.

I’ll explain here. The “negative list” is a concept originated from negotiations of foreign investment treaties. During the fifth round of China-US Strategic and Economic Dialogue in 2013, China and the US agreed to hold substantive negotiations on the basis of pre-established national treatment with a negative list approach. In terms of foreign investment access, industries from which foreign investments were barred or limited should be listed in “negative lists.” Negotiations held in that mode marked that the opening up of our country had entered a new stage, which, in the meantime, also gave rise to a new revolution of our domestic public administration system, i.e., a brand-new mechanism of “negative lists.” In the past, we regulated the market access by implementing a mechanism of positive lists, i.e., listing the things we could do. On the contrary, “negative lists” specified things we could not do. Anything that was not specified on the list could be done.

Tong Daochi:

The Third Plenary Session of the 18th CPC Central Committee proposed to implement a unified institution of “negative lists” of market access. It is a significant institutional innovation to introduce the concept of “negative lists” from investment treaty negotiations into domestic economic governance. To put it simply, in the “negative lists” of market access, we treat all kinds of market participants equally, including state-owned enterprises, private enterprises and foreign enterprises. For the fields that are not on the lists, market participants can have equal access according to the law. In that case, items that require government review can be greatly reduced; the burden on enterprises can be lightened, and the market can be invigorated; and the market can play the decisive role in allocating resources.

Whether it is the “negative lists” for market access or the “negative lists” for foreign investment, both of them reflect the idea of “negative lists.” As was stated by Premier Li Keqiang, “absence of legal prohibition means freedom.” In other words, anything which is not prohibited or limited by the law can be done, which is conducive to the construction of a fair competition environment. It is a significant revolution in the management systems of the government. I hope the implementation of the institution can invigorate the market and provide more autonomous rights to enterprises. Meanwhile, “negative lists” for market access are responsible lists, for which the government should be held responsible. After restrictions are comprehensively lifted, a series of subsequent regulatory systems should be implemented to keep pace with the institution of “negative lists.”

Hong Kaihong:

Mr Xu, please.

Xu Shanchang:

It is very nice to meet you again, media friends, ladies and gentlemen, good morning! The State Council released a document on Oct 19 that focuses on implementing a series of “negative lists” for market access, and raised heated debate in the society. Mr Tong just now provided the background on the negative list. I will now introduce the main points of the document. The document is really not difficult to understand as we can summarize it in one list, two categories, three entry methods, four cohesions, five ruling principles and six reform measures.

One list means the government will give lists industries, fields and businesses in which investments are barred or limited. As for the other items that are not on the list, market players can decide themselves according to the laws. In other words, market participants will have equal access to industries, fields and businesses that are not on the lists.

Two categories means the negative list will fall into two categories of prohibited entry and limited entry in terms of the degree of enforcement.

Three entry methods means market participants’ access can be restricted in three situations.

In the prohibited entry list, market players will not be allowed to access such industries by the administrative authority.

For limited entry, there are two types. First, market players will have to apply for access, which will then be assessed by the authority. Second, market players can decide themselves whether they can access according to the requirements laid out by the government.

Market participants can have equal access to industries, fields and businesses that are not on the lists according to the laws and regulations.

Four cohesions means the negative list should be in tune with current rules and regulations. First, is the cohesion of the negative list and the administration approval lists from the State Council. Second is with the catalogue of industry structure adjustment, and the negative list should link with the industry access list. Third is with the investment catalogue approved by the government, which regulates which industries can be invested. Fourth is with the rules and regulations and the market access management decided by the State Council.

Five ruling principles. There are five principles to drafting the negative list, governed by the laws, security, gradually progressing, essential and open to the public. The government will make the negative list based on the five aspects.

Six reform measures means the market access negative list should be accompanied by reforming the related measures and mechanisms. It includes the reform of market access mechanism, approval system, monitoring mechanism, social credit system and incentive and disciplinary mechanism, information publicity and sharing system and improving the laws and regulations system.

In general, there will be procedures put into effect of the negative list. We will first try it in some regions, and then spread it nationwide. They will be put into trial in chosen areas starting on Dec 1 this year and will last until the end of 2017, and will be officially spread all over the country starting in 2018.

The negative list for the market access is an important system innovation, and is also an important base to make full use of the market’s decisive position in resources allocation. It is a necessary measure to better use the government’s function and build up an open economic mechanism. It is also a positive boost to stabilize the economic growth and expectations, encourage market confidence and vigor. Therefore, when the opinions on implementing a series of “negative lists” for market access was published on Oct 19, it received great attention and praised by all sides by the public.

This is my introduction. Now we will answer questions. Thank you!

Hu Kaihong:

Thank you, Mr Xu. Mr Mao, please.

Mao Qun’an:

Good morning, friends from the press. The State Council General Office recently issued a guideline to promote a multi-level system for medical treatment. People complained that there are too many patients seeking treatment in big hospitals. A multi-level medical treatment system can relieve the problem and improve the quality and efficiency of medical treatment.

When people have health problems, they can first go to nearby community-level hospitals. These hospitals can transfer patients to higher-level hospitals depending on the severity of the situation. On the other hand, higher-level comprehensive hospitals can transfer patients who are recovering from surgery to lower-level hospitals. Another thing is, people who have acute illnesses should be sent to big comprehensive hospitals. Chronic illnesses such as high blood pressure and heart attack not only need to be treated in big hospitals, but also need to have long-term care in community-level hospitals. Higher-level hospitals should also support lower-level hospitals in technology to improve medical services.

The guideline gives rise to some problems: Firstly, for the medical service system. Different level hospitals need to be positioned according to their functions. Some adjustments need to be made in the medical insurance system and medical treatment prices. Second is to make people understand the multi-level medical treatment system and accustom them to the new system. To promote the system, we have set pilot areas nationwide and gathered some experience.

This is just a simple introduction. I’ll answer your questions later, thank you.

Hu Kaihong:

Thank you, Mr Mao. Any questions?

Economic Daily:

What is the relationship between negative list for market access and negative list for foreign investment? Does the trial implementation of negative list for foreign investment provide any experiences or lessons?

Tong Daochi:

The two negative lists have connections and differences. For foreign investors, they only have access to fields that are not on the list for foreign investment, because some fields are barred or limited. On this basis, market participants from home and abroad enjoy equal market access.

The negative list for foreign investment is drafted according to the results of our negotiations with other countries. We are on such talks with the United States to shorten the list.

However, the negative list for foreign investment concerning free trade zones in Shanghai and Tianjin municipalities, and Guangdong and Fujian provinces is drafted on our own, not the result of negotiations. The list implemented in Shanghai FTZ was shortened from 139 items to 122 items, with breakthroughs in such fields as manufacturing, shipping and commerce. The list can be seen as a pilot project, and will help us explore a new management mode by expanding it to the whole country.

By the end of August, a total of 3,900 foreign invested enterprises have been set up in the four free trade zones, an increase of 109 percent year on year; foreign investment contracts worth 293.7 billion yuan have been signed, a year on year growth of 240 percent.

Negative list for market access targets all the enterprises, both foreign and domestic, but negative list for foreign investment only targets foreign invested ones. Internationally speaking, every country has special management measures when foreign capital enters into particular fields. That’s why we have to make negotiations with the US on negative list for foreign investment. With the deepening of the opening up, the list will be further shortened. All in all, the two lists share the same principle, but their contents are different.

Xu Shanchang:

Using a metaphor, the two lists are like two successive doors. When foreign investment enters the Chinese market, it must abide by the negative list for foreign investment. After that, according to the principle of national treatment, it must abide by the negative list for market access. Therefore, the market access negative list is ordinary management measures, while the foreign investment negative list is special management measures. Both of the two lists apply to foreign invested enterprises, but for domestic investment, negative list for market access is enough.

CCTV:

Mr Mao, what measures will be taken to promote the multi-level medical treatment? And what are the difficulties and problems that need to be resolved?

Mao Qun’an:

I have explained the basic principal of multi-level medical treatment. I went to the Beijing Chaoyang Hospital and Liulitun Health Service Centre several days ago to learn how they put the multi-level medical treatment into practice. They have set up a medical care union. Patients go to receive treatment at the Liulitun Health Service Centre, a community level healthcare center. After diagnosis, if the healthcare center thinks a patient needs treatment at the Chaoyang Hospital, it can help arrange an appointment with a doctor at the hospital directly through a green channel. And if a patient undergoes an operation at the Chanyang Hospital, after the initial treatment, he will be transferred to a lower level medical institution to recover.

Patients with some chronic diseases, such as diabetes, high blood pressure, need medical diagnosis and prescription from specialized hospital and long-term healthcare management. He can go to specialized doctor at large hospitals for accurate diagnosis and prescription and go to community doctor for daily care and medicine. When the community doctor thinks he needs to be treated by a specialized doctor, he will be transferred to a high-level hospital. And specialized doctors from large hospitals visit the community at regular intervals and the patients can consult them whether their treatment plans need to be adjusted.

Mao Qun’an:

When I arrived at the Chaoyang Hospital at 10: 00 am, I asked where were the patients waiting in lines. The director of the hospital told me that nowadays few people wait in lines. Even in peak hours, the waiting time is less than 10 minutes. Because outpatients can make appointments in advance and come at different time, some at 9:00 am, some at 10:00 am or 11:00 am according to their appointment time. I also learnt that a high level doctor from the Chaoyang Hospital will make a community tour every month, which helps improve the community healthcare center’s medical treatment capacity and also facilitate their cooperation with the center.

Through the coordination between the union of Chaoyang Hospital and Liulitun Health Service Centre and medical insurance institution, no extra fees are charged when transferring among different medical care institutions, which is supported by the medical insurance policy. We will use the economic lever to guide patients to receive treatment at the community level healthcare institutions. The patients can reasonably choose where to receive treatment and enjoy the convenience and benefits brought about by the multi-level medical treatment system.

China News Service:

What is the consideration of the government in implementing the negative list of market access and what is the relationship between the negative list and the current market access policies? Thank you.

Xu Shanchang:

The implementation of the negative list is a step to better deal with the relation between government and market when the reform is undertaken to further improve socialist market economy system.

Thus, negative list of market access will be a new management mode under an improved socialist market economy system.

Future market management will have three lists: power list, responsibility list, and negative list.

This is an important institutional arrangement as it makes it clear what areas are accessible and what sectors are prohibited, which enables market and government to play an effective role in resource allocation.

Currently, China is the first nation to introduce the negative list of market access, suggesting the central government’s determination to reform our socialist market economy.

For the coordination between the new negative list of market access and the current market policies, there are four aspects:

First, the negative list should be in line with the administrative approval list of ministries under the State Council.

Second, it should coordinate with the guidance catalogue of adjustment of industrial structure which has three categories, including 1,407 items of which 761 items are encouraged to develop, 223 items are prohibited, and 423 items are ones that would be obsolete.

Third, it should coordinate with the catalogue of the government approved investment projects. The catalogue was revised in 2014 and has 12 categories and 42 items. All of these items should be enlisted in the negative list, except the items set for foreign investment and overseas investment.

Four, it should coordinate with management items of market access which are made in accordance with laws, regulations, and State Council’s decisions.

Xu Shanchang:

So far, the negative list includes two categories: prohibited list and restrained list. To make the list, it requires a lot of efforts. We have to classify prohibited items and restrained items on the basis of new development.

The negative list has two principles: necessity and simplicity. Rooms for businesses will become smaller when the list includes too many prohibited or restrained items.

Thus, we carefully sift through the items and pick up qualified ones in line with the principles.

We will adapt catalogue-like style in the negative list of market access in the future.

Xinhua News Agency:

The first question goes to Director Xu. The Fifth Plenary Session of the 18th CPC Central Committee, which just concluded, proposed to establish a new situation of two-way opening up in both East and West China. We have learned that the ‘negative list’ for market access will be first put into trial from Dec 1 in four provincial regions on eastern coast that host four free trade zones. Do you think the government will also pick some central and western regions, including those on the route of the Belt and Road Imitative for the trial later? What are the criteria for the selection of trial provinces?

The second question is for Mr Tong. The document said the government should make overall consideration for foreign negotiations and the “negative list” for foreign investment. This year, the Ministry of Commerce also drafted Foreign Investment Law for public review. Meanwhile, the China-US BIT negotiation has steered into the phrase of mapping out a “negative list”. Moreover, in 2018, we will fully implement the “the negative list” for market access. What is the overall consideration behind the three issues? Is there a relevant timetable?

Xu Shanchang:

Thank you for your first question, which covers many things that we plan to do, very professional. The released document on the negative list for market access clearly mentions that the next step is to carry out trials starting form Dec 1, 2015 to Dec 31, 2017. With the experience acquired, we will improve the list so that it will be spread all over the country from 2018.

We have been very meticulous in terms of selecting the trial places in full consideration of the provinces’ current conditions. We have decided to pick the four provincial regions that host free trade zones as the first batch of our trial locations, which are Guangdong province, Fujian province, Tianjin and Shanghai.

Next, we will further expand the scope of our trial regions in the spirit of selecting typical and representative places in different areas with different conditions. In this way, we can better copy and promote our experience. Therefore, our initial thought was to pick new places in East, Central, West and Northeast China for the trial. In the process, we will further expand the trial and accumulate experience to lay a solid foundation for the nationwide implementation of the “negative list”.

Thank you.

Tong Daochi:

First, I would like to add a little on the first question. In addition to what Director Xu answered, the four free trade zones have been the first among the country to have implemented the “negative list” for foreign investment; therefore, they have the conditions and experience for the “negative list” for market access. As for which province has the satisfactory conditions, we made the decision on an overall consideration without any bias. We will consider any place that meets the condition of opening up.

As for the second question, the 22nd round of China-US BIT negotiations are being held in Qingdao, Shandong province and the two countries are focusing on the “negative list”. In September during President Xi Jinping’s state visit to the US, the two countries have agreed to push forward and accelerate the BIT negotiations, the most important economic issue in bilateral relations, in a bid to facilitate a high-level investment treaty that features reciprocity and win-win. There are a few rounds of negotiation on the “negative list” remaining by the end of this year.

I just explained, the “negative list” for market entry targets at all enterprises. The “negative list” within the China-US BIT negotiation will be attached to the end as appendix, which will clearly state which industry foreign investment cannot gain entry, or has special requirements for foreign investment. This is the result of our negotiation. When the “negative list” will be available depends on when the negotiation finishes. We will make the “negative list” for foreign investment based on the negotiation results.

Another thing I would like to explain is that items listed on the “negative list” for market entry do not need to be listed again on the one for foreign investment, because domestic and foreign capital will be treated equally without any discrimination. However, we will list areas that treat foreign capital differently, which is common practice by every country. Every country has negative lists under bilateral investment treaties. Every country has some reservations.

Before, we relied too much on the administrative approval system. The government made decision on things supposed to be determined by market participants. Now we are transforming to the management model of “negative lists”, which will greatly improve the government’s administrative capability.

Next, one can do anything that is not prohibited or limited by the law, which will be a big change for corporate behaviors and individual life. This calls for clear central legislation. Local government cannot set up random “negative lists”. Otherwise, we will have those lists from central level to provincial level, to municipal level, to even country level, which violate the government’s main goal of streamlining administration and delegating power.

Phoenix TV:

My question is also about the negative list, especially the part about piloting the list. You just mentioned that provincial regions that meet certain criteria can pilot the program. Can you tell us in details about the criteria? The current four pilot regions have relevant experience in this regard, how will you select the next group of candidates in the future?

Xu Shanchang:

Mr Tong made it clear that we selected the four provincial regions because there is a pilot free trade zone in each of these regions. They are experienced in using the negative list approach regarding foreign investment while operating within the free trade zones, which is our major concern.

As one of our four pilot regions, Guangdong was the first provincial region in China to draft a negative list for foreign investment last year, and it volunteered to participate in our pilot program.

We plan to choose some other regions in the next phase.

As you can see, all the four regions are located along China’s eastern coast. Guangdong, Fujian, Tianjin and Shanghai are well established in terms of economy and opening-up. However, the mechanism of the negative list for market access will not only cover coastal regions, but also inland regions. So we will select some areas in central, western, and northeastern China.

One of the criteria for the candidates is that they should have a sound foundation in terms of reforms. Besides, they should have a voluntary spirit and be zealous to reform and explore institutional innovation.

Meanwhile, we will also take their unique situation into account, because even when the mechanism of a negative list is fully implemented across China in the future, the different conditions in various regions will also be taken into consideration, as well as the need for uniformity. Therefore, we will be discreet in selecting the next pilot regions.

Hu Kaihong:

That’s all for today’s policy briefing. Thank you.