The Shortened Shanghai Free Trade Zone Negative List: One Small Step for Reform…


Amidst high hopes in the foreign investment community for a streamlined framework regulating inbound investment to the PRC, China’s State Council launched the China (Shanghai) Pilot Free Trade Zone (the “SFTZ” or “Zone”) in September 2013. The establishment of the SFTZ somewhat disappointingly included a longer-than-expected “negative list” setting forth industry sectors subject to restrictions or prohibition from foreign investment in the SFTZ.

On June 30, 2014, the Shanghai People’s Government unveiled a much-anticipated shortened list (Special Administrative Measures on the Entry of Foreign Investment into the China (Shanghai) Free Trade Zone (2014 Negative List Revision) (2014); the “Revised List”). While the Revised List removes certain restrictions in sectors such as real estate brokerage, healthcare, and wholesale trade activities, the contents of the original List largely remain intact, continuing to provide regulators wide latitude to regulate foreign investment in certain sectors.

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