Preparing for a possible trade war with the US, China has facilitated regulation over a number of industrial sectors. The aim is to attract more foreign investors and to stimulate their existence on the Chinese market.

The National Development and Reform Commission, which is the main planning authority for the Chinese economy, announced that it has abolished a number of restrictions on foreign investment. The sectors concerned include shipbuilding, aircraft, geomapping, construction of energy systems and the extraction of certain key ores.

The Regulator shortened the “negative list” which contains all sectors explicitly prohibited for foreign investors. The restrictions that are also reduced concern the financial services sector, a relief which was promised for 2021. The Chinese government has been discussing such measures for the financial sector for a long time, but because of the global crisis, the period from 2012 to 2016 has proven to be stressful for the country’s economy. This has led to a prolonged delay in the reform.

Now that the economy is more stable, Chinese leaders want to attract more investment from abroad. However, the renewed “negative list” still excludes important and large sectors which China identifies as delicate and/or strategic. The cloud services are limited to Chinese investors, the same applies to oil and gas extraction.

The changes in the “negative list” come after the period in which the US announced that it would impose different customs duties on China in order to reduce its trade deficit. Despite long negotiations and light threats, there is still no change in trade relations between the two countries.

As a response to the US duties, China has renewed negotiations with the European Union for various investment agreements this week.

Since 1st July, China has reduced customs duties on cars imports from 25 to 15 percent amid promises to buy more US goods, open its markets and encourage the sector.

The decision was taken “in order to continue the reforms and the opening up of the country, to stimulate the supply and transformation, as well as modernisation of the sector in order to meet consumer demand”.