China has relaxed restrictions on foreign investment in the country’s 11 free trade zones (FTZs), per a decision released by the State Council, China’s cabinet
The Decision on Temporarily Adjusting Relevant Administrative Regulations, State Council Documents and Departmental Rules Approved by the State Council within FTZs (the Decision) updates various administrative regulations to extend to China’s new FTZs, and relaxes investment restrictions in 16 industries.
Several of the relaxed rules introduced by the Decision are technically only temporary. The Decision directs the departments in charge of the relevant industries to issue or amend regulations to formalize the changes.
The industries affected by the Decision are shipping, printing, civil aviation, certification and accreditation, entertainment venues, education, travel agencies, direct sales, gas stations, maritime transportation, retail and wholesale, aircraft, urban rail, internet cafés, banking, and performance brokerage.
The complete changes introduced by the Decision are as follows:
Note: Item (1) to Item (9) were previously temporarily adjusted for the Shanghai, Guangdong, Tianjin, and Fujian FTZs, and the new temporary adjustments shall apply to the other FTZs. Item (10) to Item (16) shall apply to all FTZs.
The relaxed rules should be welcome for investors in the affected industries looking to test the Chinese market or expand their operations in China’s growing number of FTZs.
Last year, China officially opened seven new FTZs, bringing its total to 11, and reduced investment restrictions with a new FTZ Negative List.
However, the Decision appears to merely formalize many of the changes introduced in last year’s FTZ Negative List, as well as the Catalogue for the Guidance of Foreign Investment Industries, by updating accompanying regulations accordingly. For example, the FTZ Negative List already liberalized foreign investment in Internet cafés and aviation, among other industries. The Decision therefore largely updates rules that were made outdated by recent regulatory changes.
Although the Decision does not offer many notable new liberalizations, it gives foreign investors more regulatory clarity about the implementation of the FTZ Negative List, and shows that the FTZs and industry regulators are moving forward with the changes. As the Decision directs relevant industry regulators to formulate accompanying administrative measures, investors can expect new industry-specific rules for foreign investment in China’s FTZs to be issued shortly.
Why Foreign Firms Struggle to Break Into China
In 2017, an analysis by Goldman Sachs found that while S&P 500 companies earned 30 percent of their revenues outside of the United States, China accounted for only 1 percent of their revenues.
How China is using tourists to realise its geopolitical goals
Over the last two decades, the number of Chinese overseas travellers rose by over 25 times from 5.3 million in 1997 to 130 million in 2017, contributing an estimated US$250 billion to overseas economies
How China’s role in global finance has changed radically
Within the space of just 15 years, China has gone from being the largest net lender to the world to now being a net borrower. The implications for the global economy, and China’s role within that economy, could be significant.
‘If you owe the bank $1 million, you have a problem. But if you owe the bank $1 trillion, then the bank has a problem’. It’s an old gag, but it underscores an important point: the size of your borrowing or lending can have profound implications for your role in the world.(more…)
Thailand Ecommerce Market: Shooting For Success
At present, the Thai ecommerce market is valued at USD 3.5 billion. According to a Google Temasek study, Thailand’s e-commerce...
Aspire Set to Become First SME Neobank in Southeast Asia with US$32.5 Million Raise
The recent financing has been led by Mass-Mutual Ventures Southeast Asia with participation from Silicon Valley’s Arc Labs and existing...
How is Thailand Bringing Technology to the Table?
In Asia, a country like Thailand has taken the initiative to implement agricultural biotechnology in its industry. The country has...