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Caixin

China unveils draft of latest 'negative list' for investment

New section curbing funds to media sector sparks concern over press control

China's Ministry of Commerce and the National Development and Reform Commission are seeking public comments on the draft until Oct. 14.   © AP

China has unveiled a draft revision to a list of industries for which investment is restricted or prohibited, reducing the overall number of businesses subject to entry barriers while adding new restrictions for media, finance and cryptocurrency.

The National Development and Reform Commission along with the Ministry of Commerce on Friday published a draft of their "negative list" and are seeking public comments on it until Oct. 14. for its annual revision.

The list details industries that are off-limits to both Chinese and foreign investors. Any entity not on the list is open for investment.

China started the negative list in 2018 as part of a broader effort to streamline administrative management over investments. It has revised the list every year.

Compared with the 2020 version, the draft of the latest list has reduced the number of restricted operations from 123 to 117, removing approval requirements for a number of businesses such as security training, online insurance and merger and acquisition deals by certain listed companies.

The 2021 draft includes six prohibited categories and 111 items subject to regulatory approval. It added a new section of prohibitions on investments in the news and media industry, sparking concerns over tightening control.

However, most of the media industry restrictions were already on the 2020 list, but reclassified under a designated section. They include banning the investment of nonpublic capital in the establishment and operation of news outlets, online newsgathering, editing and broadcasting, a comparison between the two lists showed. Newly added restrictions include nonpublic capital's reproduction of news content from foreign media and organizing of news industry summits and awards.

The new list also barred nonfinancial institutions from being involved in wealth management, equity crowdfunding and exchange businesses, extending last year's ban on nonfinancial companies' involvement in the banking, insurance, securities and fund management businesses.

Cryptocurrency mining was also added into the industries that will be barred from new investment, following a series of crackdowns on the business. China's central bank last month declared that all cryptocurrency-related transactions are illegal and vowed to root out crypto mining.

The revised list also extended regulatory reviews of senior financial executive appointments to personal credit rating companies and bank clearing institutions.

In 2016, China first tested managing investments with a negative list in four cities as a market liberalization pilot. The practice was expanded nationwide in 2018. The first national negative list contained 151 items under prohibition or restriction, 22.5% more than the latest draft.

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Read also the original story.

Caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Nikkei has an agreement with the company to exchange articles in English.

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