Foreign investment in China is growing as policies evolve, but navigating special administrative measures remains a key challenge for global businesses.For foreign enterprises that are interested in investing and conducting business in China, the Negative List for Foreign Investment Access is the first document that requires your attention. Please take some time to carefully review the list provided below.
Of course, should you have any questions or uncertainties, do not hesitate to contact us at any time. Eastora will be more than happy to assist you with detailed explanations and to determine whether your business can be legally conducted in China.
This list is adopted at the 10th meeting of the National Development and Reform Commission on April 8, 2024, and approved by the Ministry of Commerce, with the consent of the Party Central Committee and the State Council, promulgated by the National Development and Reform Commission and the Ministry of Commerce Order No. 23 on September 6, 2024, and implemented from November 1, 2024.
Special Administrative Measures
- Agriculture, Forestry, Animal Husbandry, and Fishery
- The Chinese share in the breeding and seed production of new wheat varieties shall not be less than 34%, and the breeding and seed production of new corn varieties must be controlled by the Chinese side.
- It is prohibited to invest in the research and development, breeding, cultivation, and production of related reproductive materials of rare and unique fine varieties in China.
- It is prohibited to invest in the breeding and production of genetically modified varieties of crops, livestock, and aquatic breeds and their genetically modified seeds (seedlings).
- It is prohibited to invest in the fishing of aquatic products in Chinese jurisdictional waters and inland water bodies.
- Mining Industry
- It is prohibited to invest in the exploration, mining, and ore dressing of rare earth, radioactive minerals, and tungsten.
- Electricity, Heat Power, Gas, and Water Production and Supply Industry
- The construction and operation of nuclear power plants must be controlled by the Chinese side.
- Wholesale and Retail Industry
- It is prohibited to invest in the wholesale and retail of tobacco leaves, cigarettes, reconstituted tobacco leaves, and other tobacco products.
- Transportation, Storage, and Postal Services
- Domestic water transportation companies must be controlled by the Chinese side.
- Public air transport companies must be controlled by the Chinese side, and the investment ratio of a single foreign investor and its affiliated enterprises must not exceed 25%. The legal representative must be a Chinese citizen. The legal representative of a general aviation company must be a Chinese citizen. In agriculture, forestry, and fisheries, general aviation companies are limited to joint ventures, and other general aviation companies are limited to Chinese control.
- The construction and operation of civil airports must be relatively controlled by the Chinese side. Foreign parties are not allowed to participate in the construction and operation of air traffic control towers.
- It is prohibited to invest in postal companies and domestic express services.
- Information Transmission, Software, and Information Technology Services
- Telecommunication companies: limited to the telecommunication services that Chinese people have committed to open to the outside world. The foreign shareholding ratio in value-added telecommunications services shall not exceed 50% (except for e-commerce, domestic multi-party communication, storage and forwarding, and call centers), and basic telecommunication services must be controlled by the Chinese side.
- It is prohibited to invest in Internet news information services, online publishing services, online audio-visual program services, Internet cultural business (except for music), and Internet public opinion release information services (except for the content that has been opened in the Chinese people’s commitments to the outside world).
- Leasing and Business Services Industry
- It is prohibited to invest in Chinese legal affairs (except for providing information related to the Chinese legal environment), and not to become a partner in domestic law firms.
- Market research is limited to joint ventures, among which radio and television viewing and listening, and television surveys must be controlled by the Chinese side.
- It is prohibited to invest in social surveys.
- Scientific Research and Technical Services Industry
- It is prohibited to invest in the development and application of human stem cells, gene diagnosis, and treatment technologies.
- It is prohibited to invest in institutions of humanities and social sciences.
- It is prohibited to invest in geodetic surveys, marine surveys, aerial photography, ground mobile surveys, administrative boundary line surveys, topographic maps, world political maps, national political maps, maps of provinces and cities directly under the provincial level, national teaching maps, local teaching maps, true three-dimensional maps, and navigation electronic map production, regional geological maps, mineral geology, geophysics, geochemistry, hydrogeology, environmental geology, geological disasters, remote sensing geology, and other surveys (mining rights holders carrying out work within their mining rights are not subject to this special administrative measure).
- Education
- Preschool, ordinary high school, and higher education institutions are limited to Sino-foreign cooperative education, and must be led by the Chinese side (the principal or the person in charge of the main administration must have Chinese nationality, and the Chinese members of the board of directors, board of supervisors, or the joint management committee must not be less than 1/2).
- It is prohibited to invest in compulsory education institutions and religious education institutions.
- Health and Social Work
- Medical institutions are limited to joint ventures.
- Culture, Sports, and Entertainment Industry
- It is prohibited to invest in news organizations (including but not limited to news agencies).
- It is prohibited to invest in the editing, publishing, and production businesses of books, newspapers, periodicals, audio-visual products, and electronic publications.
- It is prohibited to invest in broadcasting stations (stations), television stations (stations), radio and television channels (rates), radio and television transmission networks (transmission stations, relay stations, radio and television satellites, satellite uplink stations, satellite receiving stations, microwave stations, and radio and television transmission coverage networks, etc.), and to engage in radio and television video-on-demand services and satellite television ground receiving facility installation services.
- It is prohibited to invest in radio and television program production and management companies (including import business).
- It is prohibited to invest in film production companies, distribution companies, cinema chain companies, and film import business.
- It is prohibited to invest in cultural relic auction companies, cultural relic stores, and state-owned museums.
- It is prohibited to invest in literary and art performance groups.
List Instructions
- The “Foreign Investment Access Special Administrative Measures (Negative List)” (hereinafter referred to as the “Foreign Investment Negative List”) uniformly lists special administrative measures such as equity requirements and senior management requirements for foreign investment access. Outside the “Foreign Investment Negative List”, management is implemented in accordance with the principle of treating domestic and foreign capital equally. Domestic and foreign investors uniformly apply to the provisions of the “Market Access Negative List”.
- Overseas investors are not allowed to act as individual industrial and commercial households, sole proprietorship investors, or members of farmers’ professional cooperatives to engage in investment and business activities.
- Foreign-invested enterprises investing in China should comply with the relevant provisions of the “Foreign Investment Negative List”.
- Relevant competent departments, in the process of performing their duties according to the law, if overseas investors intend to invest in fields within the “Foreign Investment Negative List” but do not meet the stipulations of the “Foreign Investment Negative List”, will not handle permits, business registration, and other related matters; for those involving approval of fixed asset investment projects, they will not handle related approval matters. In fields with equity requirements, foreign-invested partnership enterprises shall not be established.
- With the review of the relevant competent departments of the State Council and the approval of the State Council, specific foreign investments may not apply to the provisions of the relevant fields in the “Foreign Investment Negative List”.
- Domestic enterprises engaging in business activities prohibited by the “Foreign Investment Negative List” that go overseas for the issuance and listing of shares shall be subject to the review and approval of the relevant competent departments of the State Council.
Overseas investors are not allowed to participate in the operation and management of the enterprises, and their shareholding ratio shall be executed in reference to the relevant regulations on the domestic securities investment management of overseas investors.
- Domestic companies, enterprises, or natural persons that acquire domestic companies with which they have an association relationship through companies legally established or controlled overseas shall handle foreign investment, overseas investment, foreign exchange management, and other relevant regulations.
- The “Foreign Investment Negative List” does not list measures related to cultural, financial fields, and administrative approvals, qualification conditions, national security, etc., which shall be implemented in accordance with current regulations.
- The “Closer Economic Partnership Arrangement” between the Mainland and Hong Kong and its subsequent agreements, the “Closer Economic Partnership Arrangement” between the Mainland and Macao and its subsequent agreements, the “Cross-Strait Economic Cooperation Framework Agreement” and its subsequent agreements, international treaties and agreements to which China is a party or has joined, have more favorable access treatment provisions for foreign investors, which can be implemented in accordance with relevant regulations. In special economic areas such as free trade pilot zones, more favorable opening measures are implemented for eligible investors in accordance with relevant regulations.
- The “Foreign Investment Negative List” shall be interpreted by the National Development and Reform Commission and the Ministry of Commerce in conjunction with relevant departments.
- The 2021 edition of the “Foreign Investment Negative List” released by the National Development and Reform Commission and the Ministry of Commerce on December 27, 2021, shall be abolished from November 1, 2024.
