The List of Exceptions to Foreign Investment Access in China (the “Exceptions List”) is part of the Chinese foreign investment regulatory framework. The Chinese government’s goal for the Exceptions List is to restrict foreign investment in commercial activities, business operations, and investments within certain industries or fields.
In international trade policy documents, it is referred to as a “Negative List” and is the opposite of a “Positive List”. The current Exceptions List was developed by the government after extensive discussions and negotiations between interested government agencies and business stakeholders to ensure it aligns with public interests and broader policy objectives.
Policy Focus
The Exceptions List focuses predominantly on specific industries and fields, and its application may vary based on a range of factors related to economic conditions and government policy needs. As a result, the list is regularly revised and updated to maintain relevancy and effectiveness.
Fundamentally, the Exceptions List serves to regulate foreign investment in strategic industries and business entities and imposes restrictions on foreign ownership within certain industries as part of China’s broader strategy to serve the public interest by maintaining economic stability.
Regulatory Functions
As a regulatory instrument, the Exceptions List is used to achieve regulatory oversight for foreign investment. The Chinese government aims to use it to better regulate market access and prevent monopolistic and unfair business practices while protecting consumer rights and safeguarding national security and economic interests.
The Exceptions List primarily achieves this purpose by limiting the potential threats arising from certain foreign entities, individuals, or products through foreign investment restrictions.