Establishing an open and accessible business environment has been a crucial priority for China since the very start of its reform drive.
At first, there was a limited list of economic sectors that could receive foreign direct investment. This list has grown, of course. And after limited regional experiments in permitting foreign investment as a rule and not an exception, the decision was made to do away with the economic sector white-list altogether, replacing it with a much shorter blacklist of sectors where foreign investment was forbidden.
Today, this “negative list” system, which permits foreign investment in economic sectors by default, went national.
On Dec 24, the National Development and Reform Commission (NDRC) and the Ministry of Commerce issued the 2018 edition of “Negative List for Market Access.”
“The full implementation of the market access negative list system means that China has established a unified and fair rules-based system in the field of market access, which means that industries, sectors, businesses and all types of market entities outside the list, can choose whether or not to enter according to law,” said Xu Shanchang, director of department of economic reform at NDRC.
The main body of the list includes two categories: a “prohibited access category” and “permitted access category.” Among them, 147 sectors are permitted, including key industries like manufacturing, transportation, finance and entertainment. Only four sectors are out of bounds.
“For matters of permit access, the market entity shall file an application, and the administrative organ shall make a decision on whether or not to grant access according to the law or regulation prescribed by the government,” said Xu Shanchang.
Planners hope the negative list system will give play to the decisive role of the market in resource allocation, and deliver robust returns for investors.