The latest revisions of the ‘Negative List’, jointly released by China’s National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM), took effect on 1 January 2022. The shortened Negative List demonstrates China’s continued willingness and ongoing efforts to attract foreign investment and spur economic growth.

This article explains the so-called Negative List for foreign investment, lists the industries where foreign investment will be prohibited or restricted, and highlights where these policies have been relaxed or eliminated.


1. What is the ‘Negative List’?

The Special Administrative Measures (Negative List) for Foreign Investment Access (from now on referred to as the Negative List) is a list of industry sectors in which foreign investment is prohibited or restricted.

In summary:

  • Foreign investors shall not invest in the sectors where foreign investment is prohibited, as prescribed in the Negative List for foreign investment access.
  • To invest in the fields where investment is restricted, foreign investors shall conform to the investment conditions, such as shareholding limits and senior management requirements, stipulated by the Negative List.
  • For industries not on the Negative List, foreign investors shall be treated equally as their domestic counterparts.

The Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (referred to as the FTZ Negative List) follows the same logic, but is less restrictive than the national list, and only applies to China’s pilot free trade zones. In China, it’s common to test new policies on a pilot basis in free trade zones (FTZs), before being implemented more broadly if deemed successful.


2. The Negative List for foreign investment access (2021 edition) 

The new version of the nationwide Negative List reduced the number of restrictive measures from 33 to 31 and for the FTZ Negative List from 30 to 27. The FTZ Negative list relaxed or eliminated several restrictive measures as a gesture for a higher degree of opening-up in China’s pilot free trade zones. The last column in the table below compares the two negative lists and highlights the relaxation of the policies.


Restrictive measures Industrial sectors Sub-sectors subjected to restriction FTZ Negative List
Prohibited Agriculture, husbandry, and fishery

Investment in the cultivation of Chinese unique, rare, and precious varieties and the production of related propagative materials.

Restriction upheld

Investment in breeding and seeding of genetically modified varieties of crops, livestock, and poultry.

Restriction upheld

Investment in the fishing of aquatic products under Chinese jurisdiction.

Restriction eliminated
Prohibited   Mining

Investment in rare earth, radioactive minerals, and tungsten. 

Restriction upheld
Prohibited Manufacturing

Investment in processing techniques of Chinese herbal medicines and production of confidential prescription products of proprietary Chinese medicines.

Restriction eliminated
Prohibited Wholesale and retail Investment in tobacco products. Restriction upheld
Prohibited Postal

Investment in domestic postal and express mail businesses.

Restriction upheld
Prohibited IT

Investment in internet news, internet publishing, audio-visual programs, and cyberculture (except music).

Restriction upheld
Prohibited Legal services

Investment in Chinese legal affairs*.

*A foreign investor shall not be appointed as a partner of a Chinese law firm.

Restriction upheld
Prohibited Social surveys Investment in social surveys. Restriction relaxed
Prohibited Scientific research

Investment in the development of human stem cells, genetic diagnosis, and treatment technologies.

Restriction upheld
Prohibited Humanities and social science

Investment in humanities and social science research institutions.

Restriction upheld
Prohibited Surveying and mapping

Investment in geodetic surveying, marine mapping, aerial photography and mapping, administrative boundary mapping, a compilation of maps, and surveys of mineral geology, geophysics, geochemistry, earth hydrogeology, environmental geology, geological disasters, remote sensing geology, etc.

Restriction upheld
Prohibited Education Investment in compulsory education or religious education institutions. Restriction upheld
Prohibited Culture and entertainment

Investment in:

  • news organisations.
  • editing, publishing, and producing books, newspapers,
  • periodicals, audio-video products, and electronic magazines.
  • all levels of radio stations and television stations.
  • radio and television programs.
  • film production, distribution, importation, and cinemas.
  • performing art groups.
Restriction upheld
Restricted Agriculture

New variety breeding and wheat seed production: the Chinese party shall hold no less than 34% of the share.

New variety breeding and seed production of corn: the controlling stake shall be held by the Chinese Party.

Restriction upheld
Restricted Manufacturing

Printing of publications: the controlling stake shall be held by the Chinese Party.

Restriction eliminated
Restricted Nuclear power plants

Construction and operation of nuclear power plants: the controlling stake shall be held by the Chinese Party.

Restriction upheld
Restricted Transportation

Domestic water transport companies: the controlling stake shall be held by the Chinese Party. 

Public air transport companies: 

  • the controlling stake shall be held by the Chinese party
  • the share of a foreign investor and its affiliates shall not exceed 25%
  • the legal representative must be a Chinese citizen. 

General aviation companies:

  • The legal representative shall be a Chinese citizen
  • general aviation companies in agriculture, forestry, and fishery shall be limited to joint ventures
  • the controlling stake in other types of general aviation companies shall be held by the Chinese party. 

Airports and towers:

  • Civil airports: the comparative controlling stake shall be held by the Chinese Party. 
  • Airport towers: foreign investment is not permitted. 
Restriction upheld
Restricted IT

Telecommunication companies:

  • Investment in essential telecommunication services: the controlling stake shall be held by the Chinese Party.
  • Investment in value-added telecommunication services (except for e-commerce etc.): the foreign share ratio shall not exceed 50%. 
Restriction upheld
Restricted Market surveys

Market surveys shall be limited to joint ventures.

Radio and television rating surveys: The Chinese party shall hold the controlling stake.

Restriction relaxed



Pre-school, regular high school, and higher education: limited to the form of Chinese-foreign cooperative schools, which Chinese investors must dominate.

Restriction upheld
Restricted Healthcare Medical institutions are limited to joint ventures. Restriction upheld

3. The ever-shortening Negative List in China

The Catalogue of Industries for Guiding Foreign Investment (referred to as the Catalogue) was first announced in 1995, containing three lists of industries that are encouraged, restricted, and prohibited for foreign investment. There were 142 items subjected to restrictions. 

In 2017, the Catalogue launched the nationwide ‘Negative List’ system for the first time, including only 63 items subjected to restrictions. The 2021 revision of the Negative List marks the fifth consecutive year that China relieved the restrictive measures for foreign access, with more than half of the restrictive measures reduced in 2017.


4. The foreign business-friendly environment

The Foreign Investment Law (FIL), effective from 1 January 2020, streamlined multiple scattered legislations regulating foreign investment in China. The long-awaited landmark legislation aims to improve the country’s business environment for foreign investors and ensure that foreign-invested enterprises (FIEs) can compete with their domestic counterparts on an equal footing in China in economic sectors outside the Negative List, with investment protection such as access to governmental procurement, financing, market-entry, IPRs protection, and equal weight in rulemaking. To understand how the Foreign Investment Law could impact your company, please refer to our previous guide.

The wide-ranging legal and regulatory reforms – the implementation of the FIL, the continued expansion of the encouraged Catalogue, the shortening of the two Negative Lists, together with other ongoing regulatory updates and initiatives – reaffirm China’s firm commitment to greater opening-up and expanded foreign access in a broader range of larger sectors. 


5. How can Hawksford help?

We are an established provider of company registration and outsourced corporate services in China. With more than 100 multilingual professionals based in Shanghai, Beijing, Changshu, Guangzhou, and Shenzhen, we not only assist our clients in the company registration formalities, but also offer back-office support such as accounting, tax, bookkeeping, and payroll solutions to enable our clients to dedicate to their core businesses fully.

We have consolidated experience advising our clients on market-entry strategies, changes in legal structures, corporate governance, compliance, and internal control offering a wide range of customised solutions.


Looking to set up a business in China?

Hawksford can advise you on the best structure. Get in touch today.

Most recent articles


Hawksford wins trust company...

Read more

Five sectors that are...

Read more

Investing in innovation: A...

Read more