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China Tax & Investment News | China set to further relax market entry for foreign investors – recent promulgations revealed a more open market by further shortening of negative lists and expanding applicable scope of encouraged industries for foreign investments
China Tax & Investment News (CTIN) is a bilingual thought leadership prepared by EY’s China Tax Center team and distributed in PDF to all EY clients which have subscribed to EY email notifications. Different from China Tax & Investment Express (CTIE), which is a weekly quick briefing on multiple rules/regulations/polices officially issued in that period, CTIN – normally focusing on one ruling or one type of issues/industries each issue - provides more detailed interpretation and in-depth business implication analysis on significant policies as well as trends of development in tax and business related areas.
Chinese President Xi Jinping announced five major initiatives for a new round of opening up at the 2019 G20 summit on June 28th, to further relax China’s markets entry and continuously improve the openness of the business environment. The industrial areas mentioned to be further opened include agriculture, mining, manufacturing and service sectors. President Xi also added that restrictions on foreign investment (currently under a specific Negative list) will be further lifted.
China has been translating the G20 commitment into action. In response to President Xi’s declaration, on 30 June 2019, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) jointly released the 2019 Negative List and the 2019 Free Trade Zones (PFTZ) Negative List, to shorten the industry list that foreign investments are prohibited/restricted. In addition, the 2019 Catalogue of Encouraged Industries for Foreign Investment (2019 Catalogue) was also released at the same time, with an expanded applicable scope. The two lists and the catalogue will become effective on 30 July 2019.
This issue of China Tax & Investment News discusses the key content changes brought by these two lists and the catalogue as well as the relevant potential implications.
For more information, please contact your usual EY contact or one of the EY’s China tax leaders in the list attached at the end of this tax alert.