The National Development and Reform Commission (“NDRC”) and the Ministry of Commerce (“MOFCOM”) recently issued the Draft Negative List for Market Access (Pilot Version) (the “Draft”). The Draft contains a list of 328 items (industries, sectors and businesses), prohibiting market access in 96 items and restricting access in 232 items. It will first be implemented in Fujian, Guangdong, Shanghai and Tianjin as a pilot project until December 31, 2017. From 2018, as announced in previous legal flashes, the implementation of the negative list system will extend to all provinces.

Prohibited items are strictly forbidden: no entity is allowed to engage in them, and the authorities will not examine or approve these projects. For restricted items, entities can either apply to participate or participate by fulfilling the requirements set by the government. Items that are not prohibited or restricted are only subject to registration.

Regarding the interaction between the Draft and the special administrative measures for foreign investment admission (negative list) currently in effect in the pilot free-trade zones (“FTZs”) in the four provinces and municipalities above, in the press conference on the Draft on April 8, 2016, officials from the NDRC confirmed that the special administrative measures (currently, 122 items) and the negative list for market access (currently, 328 items, where foreign and domestic investors are treated equally) are applicable to foreign- invested enterprises in these four FTZs.

Date of issue: April 8, 2016. Effective date: as of approval by the State Council of the pilot scheme submitted by each pilot area