Market opening vs. investment ban: New negative list in China — An Overview


published on 22 November 2021 | reading time approx. 2 minutes

by Christina Gigler


The National Development and Reform Commission (NDRC), China's top economic regulator, unveiled on 8 October 2021 the latest draft version of the negative list for market access to solicit public opinions until 14 October 2021.




The negative list details industries, projects or entities that are prohibited or restricted for foreign investment in China. All other sectors not mentioned in the negative list are presumed to be open and permitted.


Therefore, the annual adjustment of the negative list is closely followed by the market to observe the direction of China´s national industrial policy. NDRC data shows that China has revised the list for three consecutive years, from 2018 to 2020, and the number of items on the list has been reduced by nearly one-fifth.


Major Changes in the Prohibited or Restricted Sectors of the draft Negative List (2021 version)

The draft Negative List (2021 version) lists six prohibited sectors, one more than the previous Negative List 2020, and 111 restricted sectors subject to regulatory approval, seven less than the previous Negative List 2020. In total, investments in 117 sectors are thus either prohibited or restricted, six less than in 2020.


Items that are prohibited for market entry

In comparison to the Negative List 2020, the addition of the clause "prohibited from carrying out news media-related businesses" attracted the most attention. The draft 2021 list prohibits to invest non-public capital in media-related businesses.


According to the draft 2021 list, non-public capital shall not be invested in news gathering, editing and broadcasting business. Introducing news released by foreign media is also forbidden. Besides, non-public capital shall not be invested in the establishment and operation of news organizations, including news agencies, newspaper publishing units and radio and television broadcasting organizations.


In addition, the draft 2021 list bars non-financial institutions from involvement in wealth management, equity-based crowdfunding and exchange businesses.


Further market opening

Seven items in the licensing category have been deleted in the new draft. Industries that might concern you:


  1. Finance
    Obtaining approval is no longer required for issuing shares or carrying out mergers and acquisitions of specific listed companies.
  2. Leasing and Business Services
    The item "no one may conduct foreign-related statistical investigation business without obtaining approval" was deleted.
  3. Health and Social Work
    Business related to medical radioactive products can be carried out without obtaining the license or meeting qualification conditions.
  4. Internet Market
    In the catalogue of prohibited items for internet market access, the license for providing internet financial information service is no longer needed.


Further restrictions

While the new negative list eased market access for a number of industries, China has added cryptocurrency mining to the industries that will be barred from new investment, in line with the recent announcement of China`s central bank that business activities involving cryptocurrencies are categorized as illegal.


In addition, in the field of culture, sports and entertainment, it is not allowed to establish a publishing media organization or engage in specific publishing media related business without approval. Further restricted industries include the manufacturing industry related to the production, operation and project construction of specific chemicals, as well as the fields of water resources, environment and public facilities management.



With the nationwide implementation of the negative list system, the government has shifted from focusing on prior approval to strengthening in-process and ex-post record-filing and supervision, shifting the regulatory threshold to a later stage. In the new draft 2021 list the overall number of businesses subject to entry barriers has been reduced, while new restrictions have been added for media, finance and cryptocurrency. In a nutshell, the government's ongoing efforts to further shorten the negative list are supposed to contribute to further market access, and at the same time to support China´s "dual circulation" policy, where the domestic market is the mainstay, while the domestic and foreign markets complement each other.

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