The PRC’s Special Administrative Measures (Negative List) for the Access of Foreign Investment, which take effect November 1, removes all manufacturing sector restrictions.
China also announced plans to remove restrictions pertaining to the telecommunications, education, and medical services sectors.
On August 19, 2024, the Chinese State Council reviewed and approved several documents, including the Special Administrative Measures (Negative List) for the Access of Foreign Investment (2024) (“Negative List 2024”). The Negative List 2024 was formally issued by the National Development and Reform Commission and the Ministry of Commerce on September 6 and takes effect on November 1.
In China, foreign investment is generally allowed unless specifically prohibited or restricted by the Negative List. The Negative List 2024 removes two previous restrictions in the manufacturing sector: i) the printing of publications, and ii) the application of processing techniques such as steaming, frying, roasting, and calcining of traditional Chinese medicinal tablets, and the manufacture of proprietary Chinese medicines with undisclosed ingredients. After the Negative List 2024 takes effect, there will be no remaining restrictions in the manufacturing sector, and foreign investors will be entitled to equal treatment with Chinese investors in this sector.
Implications for U.S. Higher Education Institutions
The Chinese State Council also pledged to promote the opening up of telecommunications, education, medical services to the outside world. Back in July 2024, the Opinions of the State Council on Promoting the High-Quality Development of Service Consumption stressed the importance of removing foreign investment restrictions in the telecommunications, education, elderly care, medical care, and health sectors. For example, under the current Negative List, foreign entities are prohibited from investing in compulsory education and religious education institutions, and they must work with Chinese institutions to operate preschools, high schools and higher education institutions. Although the Negative List 2024 did not change any existing restrictions in the education sector, China’s indications that it will continue to eliminate restrictions on foreign investment may soon bring new possibilities for U.S. higher education institutions seeking to invest in China’s education sector.