Negative list in need of some positive tweaks

China should make its framework compatible with other countries to promote trade agreements

The term negative list has become a catchphrase since the Chinese government decided to adopt one list in its negotiations on a bilateral investment treaty with the United States last July. On Sept 30, China announced its first negative list in governing foreign investment, applying it to the Shanghai (China) Free Trade Zone.

While negative lists are new in the world's second-largest economy, the US has used them widely in investment treaties with other countries since the 1980s. In 1982, the US designed a template for bilateral investment treaties, which was updated and revised in 1994, 2004 and again this year. In all of them, the negative list played an important role.