Issued new Negative List for Foreign Direct Investment

01 Jan 2022

On 27 December 2021, the National Development and Reform Commission and the Ministry of Commerce jointly issued the 2021 Negative List for Foreign Investment Access, which replaced the 2020 edition and took effect on 1 January 2022. FDI in China is subject to a Negative List which “prohibits” or “restricts” certain industries for foreign investment purposes.

The new list reduces the number of sectors restricted or prohibited to foreign investors from 33 to 31. The two sectors removed from the earlier edition include:

1) Automobile Manufacturing: foreign companies are no longer subject to a 50% investment cap on the manufacture of all complete passenger vehicles, including internal combustion engine vehicles, and they are no longer required to cap the number of joint ventures in China for the same production line at two.

2) Satellite Television Broadcast Ground Receiving Facilities: while this sector no longer appears on the FDI Negative List, it remains on the Negative List, and both Chinese and foreign investors are required to receive regulatory approval to invest in this sector.