Shorter negative lists for positive growth
The National Development and Reform Commission and the Ministry of Commerce recently promulgated a new version of two negative lists for foreign investment access in pilot free trade zones, which come into force on July 23.
The new version shortens the length of the negative lists and raises the opening-up level of the service, manufacturing and agriculture sectors. China has been shortening the two negative lists for three consecutive years, serving as a ballast to stabilize economic globalization and promote global capital flows, and setting a good example of global investment liberalization during the novel coronavirus outbreak.
At a time when economic globalization and cross-border capital flows are encountering headwinds because of the pandemic, the shortening of the two negative lists will have a "negative pressure siphon" effect on foreign capital headed for the Chinese market and exert a positive influence on the Chinese and global markets.
Given that China is a beneficiary of globalization and a haven for global capital investment, the shortening of the two negative lists will not only expand the space for foreign investment but also provide more opportunities for global capital.
During this pandemic, easing investment is crucial to breaking anti-globalization barriers, and creating a better investment environment is essential to better facilitate cross-border capital flows. China is doing just that by shortening the two negative lists.
According to a report recently released by the United Nations Conference on Trade and Development, global foreign direct investment is expected to shrink to less than $1 trillion (7.07 trillion yuan) this year because of the novel coronavirus outbreak, down 40 percent from last year and the lowest in the past 15 years.
During this grim situation, China's decision to shorten the two negative lists will play a key role in activating investment. It will help China retain the bulk of foreign investment as a manufacturing power and by leveraging 5G and artificial intelligence technology, attract more capital.
The shortening of the two negative lists shows China's commitment to continuously improve the investment environment, raise foreign investors' expectations and enhance their confidence.
Compared with 2019, the 2020 version of negative lists improves the opening-up level for the service, manufacturing and agriculture sectors, conforming to the appeal of the international community and the demand for cross-border capital. At a time when major markets around the world are becoming increasingly conservative, especially when "core sensitive areas" and capital investment are not allowed by some countries to open to specific countries in the name of "security concerns", China's decision to open the three sectors wider to the outside world highlights its efforts to promote higher-level opening-up and create a better business environment for foreign investors.