Shanghai FTZ to relax 'negative list' on foreign investment

SHANGHAI - Officials at the Shanghai Pilot Free Trade Zone (FTZ) have responded to criticisms of a "negative list" which places restrictions on foreign investment in the FTZ, saying that the current list of restrictions will be relaxed next year and revised on a yearly basis. The negative list covers 1,069 businesses in 89 divisions within 18 main categories, identifying sectors in which investment is restricted or prohibited. It also contains 190 measures to control how business is conducted and managed.

Since its announcement, critics have claimed the FTZ negative list is essentially a copy of the existing Foreign Investment Industrial Guidance Catalog, but with additional restrictions. The FTZ is a test bed for economic reforms that may be expanded throughout China, but heavy restrictions on investment have dampened enthusiasm for the zone.