China removes 27 restrictions for foreign investment in free-trade zones

Banking rules eased, which in the past forbade foreign banks from underwriting Chinese govt bonds

China has removed 27 restrictions in its newly issued negative list for foreign investment in its free-trade zones, its cabinet said on Friday in a notice.

Chinese leaders have pledged to open the world's second-largest economy wider to foreign investors but a negative list specifying the areas off limits to foreign capital is in place for its eleven free trade zones, which enjoy looser trade and financial regulations on a trial basis.

Among the beneficiaries of the new negative list across more than 20 industries are foreign makers of rail transport equipment and civilian satellites, who will no longer be obliged to enter a joint venture with Chinese partners or let the Chinese side take the majority share.

Previously restricted sectors such as precious metals and lithium mining, as well as internet access services, credit rating services, and large-scale theme park construction are now open to foreign capital.

Rules on banking services, which in the past forbade foreign banks from underwriting Chinese government bonds, have also been eased.

China opened its first free-trade zone in Shanghai in 2013. Since then, ten major provinces and cities such as Zhejiang and Chongqing have been approved to establish such zones.

The State Council, or cabinet, this year announced an easing of curbs on foreign investment, in sectors such as banking, credit ratings and accounting. But it gave no details or time frame for the relaxation.

Foreign business groups have criticised China's slow pace of market reforms, saying national security regulations and industrial policies are at odds with its reform goals.