Asia IP

China announced its first "negative list" in governing foreign investmens and applying it to the Pilot Shanghai (China) Free Trade Zone (FTZ) in September 2014, and further illustrated more details of the rule applying in other three planning FTZs - in Tianjin, Fujian and Guangdong recently. 

DLA Piper reports that the "negative list" aims to allow foreign investment to take place without needing to go through an approval procedure. Instead, it would only need to register with the Administration of Industry and Commerce, which has a function similar to a companies' registry in common law jurisdictions. 

Each of the three new FTZs will make full use of its geographic location. According to Wang Shouwen, assistant minister of commerce, the Guangdong FTZ aims to deepen economic cooperation between the mainland and Hong Kong and Macao, the Tianjin FTZ is part of a push to coordinate development of the Beijing-Tianjin-Hebei region, while the Fujian FTZ is focused on deepening economic cooperation between the mainland and Taiwan.

According to Xinhua, Under the rules, effective in May, FTZ foreign companies will have to go through such review if they invest and have a controlling stake in the military industry, certain agricultural produce, major energy and resources, major infrastructure projects and telecommunication products that may affect national security.