European Chamber comments on the Chinese Government’s announcement of the nationwide rollout of two negative lists Go back »

2015-10-22 | All chapters

This represents a positive move in many respects. Existing legislation governing investment restrictions will apparently be closely integrated with the proposed lists and there is an indication that the majority of investments will be moved to a post-establishment filing system. There appears to be increased clarity and transparency, too, in that the roll-out will be subject to review, allowing for public consultation. It is also noteworthy that where countries have a bilateral investment agreement in place, or are due to do so, these will supersede the negative list.

However, the planned three-year implementation period is a long time, and if the speed of opening up matches that of some of China’s existing pilot zones then foreign companies will be disappointed. Previous applications of negative lists have demonstrated how they can still be used to heavily curtail market access, and the newly-proposed lists also detail a number of exceptions on the grounds of security. Furthermore, the announcement of two separate negative lists underscores that the government still wishes to maintain a continued divide between foreign and domestic companies, which so far has failed to prove beneficial to Chinese consumers and society at large.

European Chamber President Jörg Wuttke commented, “China has stated its ambition to become the world’s most attractive destination for foreign investment, yet making a fundamental distinction between domestic and foreign investment by stipulating two different lists sends a signal that completely contradicts this aim. Also, sweeping security exemptions could allow for wide-ranging investment restrictions beyond the lists themselves and this would undermine legal certainty for foreign investors once again.”

President Wuttke continued, “Nonetheless, European business has taken great encouragement from the fact that the government has stated that any prospective bilateral investment agreements will take precedence over the national negative list. This raises the stakes for China in the ongoing negotiations for an EU-China Comprehensive Agreement on Investment and will make its outcome even more significant.”

About the European Union Chamber of Commerce in China

The European Union Chamber of Commerce in China (European Chamber) was founded in 2000 by 51 member companies that shared a goal of establishing a common voice for the various business sectors of the European Union and European businesses operating in China. It is a members-driven, non-profit, fee-based organisation with a core structure of 45 working groups and fora representing European business in China. The European Chamber is recognised by the European Commission and the Chinese authorities as the official voice of European business in China.

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