China’s Foreign Investment Encouraged Catalogue and Negative Lists as a Tool of Foreign Direct Investment Attraction

Jacek Jakubczak

Abstract


Theoretical background: Due to the growing maturity of Chinese market the country needs to adjust its policy regarding foreign direct investment (FDI), i.e. to increase openness for FDI, to keep control over them in key industries and to influence their inflow in desired industries and regions. Adopting the negative-list approach and changes in both the negative list and encouraged industry catalogue provides tools for this challenge.

Purpose of the article: The purpose of this article is to present how changes in China’s Foreign Investment Encouraged Catalogue and Negative Lists both in free-trade zones (FTZs) and at the national level are used as a tool for managing country’s FDI inflow.

Research methods: Analysis of legal documents and reports as well as literature review.

Main findings: Starting from the adoption of negative-list approach in FTZs in 2013, the negative lists had been drastically reduced both in reference to FTZs and national level. Those reductions lead to a decrease in China FDI restrictiveness index. FTZs were used as a testing area for both the negative list composition and negative-list approach itself. Negative lists allowed the state to keep control over FDI in key industries allowing, at the same time, greater freedom for foreign investors. Encouraged catalogue is used not only as a tool for attracting FDI from desired industries but also for addressing regional inequalities.


Keywords


negative list; China; FDI

Full Text:

PDF

References


Chen, C. (2016, January). The Negative List in China—Causation, Content and Implication. In International Conference on Humanities and Social Science 2016. Atlantis Press. doi:10.2991/hss-26.2016.89.

Lewis, D.J., & Moise, D. (2018). One Belt One Road (“OBOR”) Roadmaps: the Legal and Policy Frameworks. In The Belt and Road Initiative (pp. 17-58). Boston: Brill Nijhoff. doi:10.1163/9789004373792_003.

Marcus, D. (2016). China and the Negative List Principle: Possibilities and Uncertainties. In S. Kennedy (Ed.), State and Market in Contemporary China: Toward the 13th Five-Year Plan (pp. 36-39). Lanham–Boulder–New York–London: Rowman & Littlefield.

OECD (2019), FDI restrictiveness (indicator). doi:10.1787/c176b7fa-en

Randau, H.R., & Medinskaya, O. (2016). China Business 2.0. New York–London: Springer. doi:10.1007/978-3-319-07677-5

Yao, D., & Whalley, J. (2016). The China (Shanghai) pilot free trade zone: Background, developments and preliminary assessment of initial impacts. The World Economy, 39(1), 2-15. doi:10.1111/twec.12364.

Ye Zhang, Z. (2019, July 19). China's Negative Lists, Encouraged

Catalogue for Foreign Investment. Retrieved from https://www.china-briefing.com/news/chinas-2019-negative-lists-encouraged-catalogue-foreign-investment/

Zhao, Z., & OU, S.Y. (2014). The Thinking of “Negative List” Management Mode Implemented by Administrative Approval System. Canadian Social Science, 10 (4), 120-124. Retrieved from http://www.cscanada.net/index.php/css/article/view/4714, doi:10.3968/4714.

Zhang, L. (2019, May 30). China: Foreign Investment Law Passed. [online] Law Library of Congress. Available at: https://www.loc.gov/law/foreign-news/article/china-foreign-investment-law-passed/

Zhang, X., & Corrie, B.P. (2018). Chinese Policies on Encouraging Foreign Investment. In Investing in China and Chinese Investment Abroad (pp. 13-20). Singapore: Springer. doi:10.1007/978-981-10-7983-2_11




DOI: http://dx.doi.org/10.17951/h.2020.54.2.21-29
Date of publication: 2020-06-29 12:10:39
Date of submission: 2019-11-29 19:06:26


Statistics


Total abstract view - 1070
Downloads (from 2020-06-17) - PDF - 0

Indicators



Refbacks

  • There are currently no refbacks.


Copyright (c) 2020 Jacek Jakubczak

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.