In the news: The NDRC and MOFCOM unveil a new negative list, the CSRC revises securities firms' capital requirements and all officials must take a legal exam

NDRC and MOFCOM release draft Negative List for Market Access

Last week China's top economic planner the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) released the Draft Negative List for Market Access (Trial Version), which sets out the “prohibited” and “restricted” industries to investment in the cities of Shanghai and Tianjin and the provinces of Guangdong and Fujian—where the four pilot Free Trade Zones (FTZs) are located. This follows the Opinions issued by the State Council in October 2015 detailing plans to unveil this list. It sets out 96 prohibited (i.e. off limits) and 232 restricted (i.e. subject to approval) items. This is in contrast to the 2015 Foreign Investment Industrial Guidance Catalogue, which contains 38 restricted and 36 prohibited categories, (down from 79 and 38 in the 2011 version, respectively), as well as the 2015 FTZ Negative List, which has 122 items (down from 139 in 2014). According to a copy of the draft list reviewed by China Law & Practice, areas marked prohibited include several coal and steel investments, any new projects that use outdated technology or pollute the environment, such as dye manufacturing. As for restricted industries, the list states that any production, sale, export or import of commercially encrypted products must be approved, as does the sale of products designed for internet information systems' security. Telecom businesses and equipment manufacturing, civil aircrafts and agrichemicals are also listed under this section. The negative list, at the end, also states that any subsequent laws released that impact relevant investments will be binding. We will be following up with an analysis soon—in the meantime, read this story on the plans for the list.

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