China: the new Negative List effective from January 1, 2022



On december 27, 2021 the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) issued the updated versions of the "National Negative List" applicable on a national scale and of the "FTZ Negative List" applicable only in the Pilot Free Trade Zones, effective from January 1, 2022


The main change compared to previous versions of 2020 concerns the automotive manufacturing sector. Foreign investors will therefore be able to acquire the majority in the joint ventures of the sector, exceeding the previous limit of 50% of the share capital. It will also be possible to set up new companies in the Chinese automotive sector without the need for a local partner.


In the Pilot Free Trade Zones, the opening to foreign investments is extended to all manufacturing sectors.

The new Negative List also liberalizes the sector of satellite television equipment, social surveys and seeds. For seeds, the condition is to have a local Chinese partner with a minimum of 34% of the share capital. While for the social surveys the foreign investment is limited to 33% of the share capital and the legal representative of the companies that perform these services must be of Chinese nationality.


The publishing, media in general and rare earth sectors are still closed to foreign investment.


Another interesting fact refers to the possibility of listing abroad for Chinese companies operating in sectors forbidden to foreign investment. On this point, the explanatory notes of the negative list clarify that this possibility is subject to a previous review and approval process by the Government. However, in any case, foreign investors will not be able to participate in the management and operations of these companies, as the overall share of foreign capital is limited to 30% and the share held by each foreign shareholder is limited to 10%.

According to reports from the NDRC, the new provisions of the two Negative Lists, which involve regulatory or legislative changes, will be implemented by the end of 2024.


Avv. Lifang Dong and Avv. Chiara Civitelli


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