The Reduction to the number of Items in the China (Shanghai) Pilot Free Trade Zone ‘Negative List’ is welcomed by European Industry
The European Union Chamber of Commerce in China welcomes the government’s reduction of the scope of Negative List for the China (Shanghai) Pilot Free Trade Zone (CSPFTZ) that was announced in the evening of 30th June. The announcement serves to reduce the number of items for which foreign investment is still restricted from 190 to 139. This represents a reduction of approximately 27% to the scope of the Negative List. Although the extent of the cuts is slightly lower than the European business community in China had been hoping for and some previous official press statements had forecasted, it is still a substantial decrease and an encouraging step in the right direction.
This is the first reduction to the Negative List following its release nine months ago. Since then, the Decision of the Third Plenum has been promulgated. The Decision clearly shows that there is consensus among China’s leaders that deep and broad reforms are required nationwide. The CPSFTZ, as such, has from the start been positioned as a testing ground for these reforms and for further opening up to foreign industry. Some of the items that have been removed from the Negative List are in important sectors. The revised list offers foreign enterprises greater freedom to participate in inter alia the real-estate sector by allowing firms to invest in construction, and certain manufacturing sectors such as pharmaceutical drugs, auto components and textiles. European investment into these areas could serve to bring strong benefit to China’s continued economic and societal development.
Stefan Sack, Vice President of the European Chamber and Chairman of its Shanghai Chapter, said, “In a recent survey conducted by the European Chamber, over half of European companies viewed the inauguration of the CSPFTZ as a major step towards the opening-up of the Chinese market and the creation of a level playing field for foreign business. The reduction to the scope of the Negative List re-establishes European companies’ confidence in China’s commitment to the CSPFTZ. There is, however, still great room for further eliminating many of the remaining barriers to foreign investment in the zone that would bring benefit both for European business and for China. European Chamber members hope that additional amendments will be taken in a timely and transparent manner, and that these further rounds will involve consultation with international stakeholders.”
Mr Sack added, “In addition to further reducing the scope of the Negative List, what is more important is that the Shanghai authorities now also work with China’s central-level authorities to coordinate a speedy nationwide rollout of the Negative List approach and to ensure that those
Source: The European Union Chamber of Commerce in China
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