Negative list, zero-tariff treatment exemplify China’s intensified efforts in opening up
By Ren Ping, People’s Daily
After the 20th Central Committee of the Communist Party of China (CPC) convened its third plenary session a few months ago, global observers are focusing on two landmark moves made by China as it opens its doors wider.
Zero-tariff treatment – Starting from Dec. 1, China gives all the least developed countries (LDCs) having diplomatic relations with China zero-tariff treatment for 100 percent tariff lines, becoming the first major developing country and major economy to implement such a measure.
Negative list – On Nov. 1, the new edition of China’s national negative list for foreign investment took effect, which slashed the items from 31 to 29 and removed all market access restrictions for foreign investors in the country’s manufacturing sector.
So far, China’s negative list for foreign investment has experienced eight rounds of reduction, demonstrating the country’s steady expansion of opening up. This exactly proves why the “next China” is still China, according to analysts.
In 2013, the negative list approach was first adopted in China’s inaugural pilot free trade zone (FTZ) in Shanghai, containing 190 items.
The following year saw the first reduction, which brought the number of restrictions down to 139, expanding areas of opening up while easing access requirements.
In 2015, China expanded the pilot FTZ practice to three other coastal provincial-level regions: south China’s Guangdong province, north China’s Tianjin municipality, and southeast China’s Fujian province. This year, the list witnessed further shrinkage to 122 items and was applied to all FTZs. This second round of reduction removed all restrictions in the general manufacturing sector, including agricultural product processing and alcoholic beverages.
Starting from 2016, China’s negative list for foreign investment was implemented nationwide. At the same time, China piloted the negative list for market access in four provinces and municipalities to introduce the market access negative list into its domestic economic governance.
The third reduction came in 2017, as China slashed the items on the national negative list for foreign investment to 63. Besides, the country applied the list to all its FTZs while also trimming the items on the FTZ negative list to 95. This round of reduction furthered opened sectors such as rail transportation equipment manufacturing and pharmaceutical manufacturing.
In 2018, the number of items on the national negative list was cut down to only 48, while that on the FTZ negative list was reduced to 45. In addition, the system of a negative list for market access was fully implemented nationwide in China.
The fifth and sixth reductions took place in 2019 and 2020, with the number of restrictions on the national negative list lowered to 40 and 33 respectively, and the FTZ negative list to 37 and 30 respectively, creating a more open, accessible and fair investment environment.
In 2021, there were only 31 and 27 restriction items on the national and FTZ negative lists respectively. This seventh round of reduction made all Chinese manufacturing sectors open to foreign investors in the pilot FTZs.
On Nov. 1, 2024, the new edition of the national negative list came into effect, which scrapped the two remaining manufacturing-related items on the previous list, marking the eighth reduction.
The eight rounds of reduction, addressing practical concerns and looking toward long-term development, demonstrate China’s intensified efforts and growing confidence in expanding opening-up.
The manufacturing sector was the earliest sector in China to open up to foreign investors, and is also the most competitive and closely coordinated one in terms of global industrial division of labor. The removal of all market access restrictions for foreign investors in the manufacturing sector exemplifies how China is promoting reform and development through opening up.
At the opening ceremony of the Boao Forum for Asia annual conference in 2018, Chinese President Xi Jinping announced that China would reduce as soon as possible limits on foreign investment in automobiles, ships and aircraft, automobiles in particular.
Subsequently, China has gradually lifted foreign investment limits in automobiles, starting with specialized vehicles and new energy vehicles (NEVs) in 2018, followed by commercial vehicles in 2020, and passenger vehicles in 2022. After a four-year transition period, China’s auto industry has achieved full opening-up to foreign investment.
China’s production and sales of NEVs accounted for over 60 percent of the world’s total in 2023, ranking first in the world for nine consecutive years. The rapid development of China’s NEV industry is attributed to the country’s strong commitment to reform and innovation, which allows it to effectively respond to the ever-changing dynamics of open competition.
Boasting the most complete industrial system globally, China has been the world’s top manufacturing country for 14 consecutive years, and has developed over 200 mature industrial clusters and 26 of the world’s top 100 science and technology innovation clusters.
China’s confidence in removing foreign investment restrictions in the manufacturing sector stems from the fact that the country has turned from a follower to a leader in an increasing number of scientific and technological areas.
Additionally, China has been advancing its manufacturing sector by focusing on high-end, intelligent, and green development, and is committed to promoting international cooperation, which has increased its capability to open up and driven its transition from a manufacturer of quantity to a manufacturer of quality.
In today’s world, win-win cooperation is the sure way to success in launching major initiatives that benefit all.
Benin is one of the LDCs designated by the United Nations. In September 2023, China officially granted quarantine access for Beninese pineapples. In November that year, Benin’s fresh pineapples made their debut at the sixth China International Import Expo. These “sugar bread of Africa” achieved the fastest entry into China in just two months, with an intended purchase deal reaching $60 million.
China is pursuing high-standard opening up, and unilaterally opening its doors wider to the LDCs, which is one of the eight actions for global development outlined by the country during the 19th G20 Summit held in Rio de Janeiro, Brazil.
During the summit, China also announced that from now to 2030, its imports from other developing countries are likely to top $8 trillion, which shows its commitment to sharing its development opportunities with the world.
The decision to give all the LDCs having diplomatic relations with China zero-tariff treatment demonstrates the country’s open-mindedness, broad vision, and sense of responsibility.
Reform and opening up is a historic process in which China and the world achieve development and progress together. China has always been committed to win-win cooperation, continuously creating new opportunities for global development through its modernization achievements.
