China's foreign-investment negative list, explained — prohibited vs restricted, and how to read it for your sector

China's foreign-investment negative list — formally the Special Administrative Measures for Foreign Investment Access — is the one document that tells you whether your sector is open. It works by exception: it names the only industries that are prohibited or restricted for foreign investors, and everything off the list receives national treatment, meaning a foreign investor is treated the same as a domestic one, with no special entry approval. There are two versions — a nationwide list and a shorter free-trade-zone list — and reading yours correctly is the first step of any China entry.

1. What the negative list actually is

Before 2020, foreign investment into China was screened case by case, sector by sector. The Foreign Investment Law, in force since 1 January 2020, replaced that with a cleaner logic borrowed from international practice: pre-establishment national treatment plus a negative list. In plain terms, foreign investors are promised the same treatment as domestic investors at the entry stage — except in the industries the state chooses to carve out, which are gathered in one place. That place is the negative list.

The practical consequence is a single yes/no question. If your business activity is not named on the list, you are, in principle, free to invest on the same terms as a Chinese company — you incorporate, you register, and no sector-specific foreign-investment approval is required beyond the ordinary licences any operator needs. If your activity is named, the list tells you on what terms, if any, you may proceed. Everything else in China entry — choosing a vehicle, filing, licensing — follows from that first read.

2. "Prohibited" versus "restricted" — the two ways your sector can appear

An entry on the list is one of two kinds, and the difference is decisive:

• Prohibited. Foreign investment is not permitted at all. There is no structure, partner or approval that opens the door — these sectors are simply closed. They cluster around areas the state treats as sensitive: certain media, news, publishing and broadcasting; some cultural activities; specified rare-earth and radioactive-mineral mining; and a handful of others.
• Restricted. Foreign investment is allowed, but only on conditions. The condition may be a Chinese-controlled joint venture (a Chinese partner must hold control, or at least a set minimum stake), a foreign-equity cap (you may own up to a stated percentage and no more), or a specific approval or qualification requirement. Restricted does not mean "come back later" — it means "here is the only shape the investment may take."

Because a restricted entry often forces a partner or a cap, it directly shapes how you structure the investment — a wholly foreign-owned enterprise may simply not be available for a restricted line of business. That is why the list read and the vehicle decision belong together; we set out the trade-offs in WFOE, JV or representative office.

3. Two lists: nationwide and the shorter FTZ version

There is not one negative list but two, issued and updated by NDRC and MOFCOM:

• The nationwide list — the Special Administrative Measures for Foreign Investment Access — applies across mainland China. The current edition is the 2024 version, with 29 items, effective 1 November 2024.
• The free-trade-zone (FTZ) list is deliberately shorter and applies inside China's pilot free-trade zones. The current edition is the 2021 version, with 27 items, effective 1 January 2022. The FTZ list is where liberalisation is usually tested first before it spreads nationwide.

The gap between the two matters. A sector that is still restricted nationwide may already be open, or open on easier terms, inside an FTZ — so your location can change your answer. The Hainan Free Trade Port goes further still, operating under its own separate, shorter list. The discipline is to check the list that applies to the exact place you intend to incorporate, not just the national default.

4. The 2024 list: manufacturing at zero, the action now in services

The single most important fact about the current list is what left it. In the 2024 nationwide edition, restrictions on foreign investment in manufacturing reached zero — a milestone first piloted in the FTZ list and then extended country-wide. For manufacturers, the message is blunt: the sector is open, and national treatment applies.

What remains is concentrated in services. Of the 29 nationwide entries, a number are outright prohibited and the rest carry conditions such as joint-venture or equity-cap requirements, across fields including certain value-added and basic telecommunications, healthcare, education, culture, and parts of finance. This is precisely where China's next round of opening is aimed — increasingly through city-by-city, sector-by-sector pilots rather than a single nationwide switch. We map where that opening is actually pointed, and what still sits underneath the headlines, in China's next wave of opening is in services.

5. What the negative list is not

Three instruments are routinely confused with the negative list. Keeping them apart saves expensive mistakes:

• The encouraged catalogue. The Catalogue of Industries for Encouraged Foreign Investment (current version issued in 2022) is the mirror image of the negative list — it names sectors China wants foreign capital in, and attaches incentives such as import-duty exemptions and tax benefits. It grants advantages; it does not restrict entry. An industry can be off the negative list and on the encouraged catalogue at the same time.
• The market-access negative list. A separate list — the Market Access Negative List — governs which activities any investor, foreign or domestic, may enter, and it runs to a different, larger count (106 items in its 2025 edition). It is not the foreign-investment list, and its numbers should never be quoted as if they were.
• Security review and licensing. Being off the negative list clears the market-access gate — it does not switch off China's foreign-investment security review, antitrust filings, or the ordinary sector licences your business needs to operate.

6. How to read the list for your sector in 2026

Reduce it to a short sequence. First, name your activity precisely — the list turns on specific business descriptions, and a near-miss category can flip your answer. Second, check both lists for your location — nationwide, and the FTZ or Hainan list if you plan to sit inside one. Third, if you are on the list, read whether it is prohibited or restricted, and if restricted, the exact condition (partner, cap or approval) — that determines your vehicle. Fourth, confirm you are reading the edition in force, because the list is revised roughly yearly and "removed from the negative list" only counts once an enacted instrument, not an announcement, says so.

That last point is where most avoidable errors live, and we walk through it in "Removed from the negative list" ≠ open: five checks. For how these reads fit into a full entry plan, and how the firm helps foreign companies scope it, see China market entry. The list is designed to make the answer simple; the discipline is to run it against the version actually in force for your sector and your city.

Frequently asked questions

Sources

• China Briefing — a guide to China's foreign-investment negative list (2024 edition, 29 items; FTZ list 2021, 27 items; manufacturing at zero).
• Norton Rose Fulbright — China eliminates all access restrictions to foreign investors in manufacturing (2024 nationwide list, effective 1 November 2024).
• Norton Rose Fulbright — analysis of China's revised national and FTZ negative lists (prohibited vs restricted; national and FTZ comparison).
• Internal: "Removed from the negative list" ≠ open: five checks; China's next wave of opening is in services; WFOE, JV or representative office.

This article is general information for foreign companies, not legal advice on any specific matter. Rules and practice change; please take advice on your facts.

← All insights