On September 8, 2024, China’s National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOC) jointly issued the 2024 edition of the “Special Administrative Measures for Foreign Investment Access” (Negative List). This latest version marks a significant step in China’s continued efforts to open its economy, with a particular focus on the manufacturing sector.

Key Changes in the 2024 Negative List

1. Reduction of Restrictive Measures: The number of restrictions on foreign investment has been reduced from 31 to 29. This reduction reflects China’s broader strategy to further open its economy to foreign capital, especially in crucial sectors.

2. Full Opening of the Manufacturing Sector:

• Publishing Printing: The requirement that publishing printing be controlled by Chinese entities has been lifted, fully opening this industry to foreign investors.
• Traditional Chinese Medicine (TCM) Processing: The prohibition on foreign investment in the processing of TCM decoction pieces (such as steaming, frying, roasting, and calcining), as well as the production of proprietary Chinese medicine secret prescriptions, has been abolished.

These revisions, effective November 1, 2024, eliminate all remaining restrictions on foreign investment in the manufacturing sector, promoting a more open and competitive environment for global investors.

The Role of the Negative List

The Negative List is a key regulatory mechanism through which China governs foreign investment in various industries. It specifies sectors where foreign investment is either restricted or prohibited, while allowing full access in industries not listed. The system was first introduced in 2013 with the establishment of the China (Shanghai) Pilot Free Trade Zone (FTZ), where it was tested as part of broader economic reforms. In this pilot zone, sectors not listed on the Negative List were automatically open to foreign investment without needing government approval.

Since then, the list has been gradually shortened as China has progressively opened more sectors to foreign investment. The 2024 edition is part of this ongoing trend of liberalization, particularly in key sectors like manufacturing.

Ensuring Smooth Implementation

The NDRC, in collaboration with the Ministry of Commerce and regional governments, will work closely with other relevant departments to ensure the effective implementation of the 2024 Negative List. This includes a commitment to ensuring that the new, more open policies are put into action smoothly and efficiently across different regions and sectors.

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