China opens more industries to foreign investment

Restrictions to be eased on foreign investment in car-making, the building of water and drainage networks in large cities, vocational education, wheat and seed production, plus nuclear power

by Nadeem Xu
China opens more industries to foreign investment
An employee works on an assembly line at an auto plant of Dongfeng Honda in Wuhan in China's central Hubei province. More restrictions on foreign investment have been lifted and one sector to benefit will be car makers. Photo: STR / AFP

(ATF) China has opened more sectors to foreign investment, relaxing ownership restrictions on brokerages, plus insurance companies and those in futures trading.

The announcement of new and shorter "negative-lists" comes as part of efforts to further open up the economy after local businesses were hammered by the coronavirus pandemic earlier this year.

The number of sectors listed as off-limits to foreign investors has been cut from 40 to 33, according to the National Development and Reform Commission (NDRC) and the Ministry of Commerce.

The list of industries prohibited from investing in free-trade zones in China has also been cut from 37 to 30.

These decisions will take effect on July 23, officials said.

An NDRC spokesman said on Wednesday the moves show that Beijing is "determined to expand its opening to the outside world, and China's firm attitude in supporting economic globalisation".

But US and European companies have long raised concerns that access to the Chinese market remains tough and complained repeatedly of unfair treatment.

Previously, foreign capital in securities companies, futures companies and life insurance could not exceed 51% of the company's total holdings.

Car manufacturing, nuclear power

Beijing will relax restrictions on foreign investment in commercial vehicle manufacturing and lift bans prohibiting foreign investment in radioactive mineral production, processing and nuclear fuel production.

While it cancelled regulations prohibiting foreign investment in air traffic control, the NDRC said the construction and operation of civil airports must be controlled by China.

In agriculture, foreign investors will soon be able to have up to 66% of firms involved in wheat breeding and seed production.

They will also be allowed to invest in some areas of traditional Chinese medicine, plus the infrastructure sector, in which they will be allowed to take majority shares in joint ventures that engage in the building and operation of water supply and drainage networks in cities with a population of more than 500,000.

In education, wholly foreign-owned institutions for vocational education will be allowed.

with reporting by AFP