China eases foreign investment curbs

China late yesterday announced the easing of foreign investment curbs on key sectors including banking, automotive, heavy industry and agriculture as it moves to open its markets further.

The National Development and Reform Commission and the Ministry of Commerce jointly released a shortened negative list, which sets out industries where foreign investment is limited or prohibited.

The new version will take effect on July 28, with the number of items down to 48 from 63 in the previous version.

In addition to confirming already announced pledges to fully remove ownership limits on industries such as insurance and autos within the next three to five years, China is also easing or removing ownership caps on businesses including ship and aircraft manufacturing, power grids, and new breeding of crops excluding wheat and corn.

Making public the new negative list is an important move to implement the central authorities’ arrangement for the opening-up strategy, relax market access to a great extent, and push forward high-level opening-up, the NDRC said.

“The new round of opening-up will provide new impetus for attracting more foreign investment, promoting market competition and raising innovation capability,” the commission said.

Earlier yesterday, the commerce ministry said it will closely monitor US policies on foreign investments and will evaluate their potential impacts on Chinese companies.

China opposes the act of tightening foreign investment rules under the pretense of national security, the ministry’s spokesman Gao Feng said.

US President Donald Trump said he supports Congress to pass legislation to protect key technologies from acquisitions by foreign entities, signaling that Washington will not roll out additional executive actions to limit foreign investments for the moment.

Gao said global investors will “vote with their feet” on the changes of the US investment climate as China actively participates in economic globalization.