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Continuously shortened negative list for foreign investment unleashes market vitality in China

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By Zhao Zhanhui, He Linping, Luo Shanshan, People’s Daily

In recent years, China has been steadily pushing forward the reform of its market access system, one of the fundamental systems underpinning the country’s socialist market economy. By continuously lowering market entry thresholds, increasing transparency of market rules, and creating a fairer market environment, China has fully stimulated the endogenous power and innovation vitality of various business entities.

China’s negative list system allows all types of business entities to equally enter industries, fields, and businesses that are not forbidden by the list in accordance with the law, without the requirement for further government approval.

In 2013, with the establishment of China (Shanghai) Pilot Free Trade Zone (FTZ) in east China’s Shanghai, the country’s first negative list for foreign investment was unveiled and implemented. The list was extended to other pilot FTZs in 2015 and implemented nationwide in 2016.

Apart from the negative list for foreign investment, China has also established the negative list for market access, the first country in the world to introduce the market access negative list into its domestic economic governance.

In 2016, the negative list for market access was piloted in four provinces and municipalities in China, and then expanded to 15 provinces and municipalities in 2017. In 2018, a nationwide unified negative list for market access was launched, marking the expansion of the list to the whole country.

By implementing the system of a negative list for market access, China has clearly defined the boundaries of government responsibility at the entry stage, fully leveraging the decisive role of the market in resource allocation and institutionalizing this approach.

Both the negative list for foreign investment and the negative list for market access started with pilot programs before gradually expanding to more regions based on the experience gained.

The negative list system has driven relevant institutional reforms in approval, investment, and regulation, effectively modernizing China’s governance system and capacity.

At the same time, China has constantly improved the mechanism for dynamic adjustment of the negative list. For instance, the current market access negative list for 2022 has reduced the number of prohibited and restricted items by 64 percent compared to the 2016 pilot edition.

The negative list system represents an important arrangement of China’s institutional opening up.

The gradual shortening of China’s negative list for foreign investment parallels the growth of foreign-invested enterprises in China.

The 2018 edition of the country’s negative list for foreign investment specified that by 2022, China would remove foreign ownership limits in the automobile industry and lift the regulation preventing foreign automakers from forming more than two joint ventures in the country.

In October 2018, the German carmaker BMW Group drafted an agreement to acquire a 25-percent stake in its Chinese joint venture, BMW Brilliance Automotive Ltd. (BBA).

In 2022, as China fully implemented the shortened negative list for foreign investment, the agreement was formally implemented, increasing BMW Group’s stake in BBA to 75 percent.

In April this year, the German automaker announced an additional investment of 20 billion yuan ($2.75 billion) in BBA’s production base in Shenyang, capital of northeast China’s Liaoning province, ready to start localized production of its new models.

The improved negative list system represents China’s efforts to promote institutional opening up. China has been committed to promoting high-standard opening-up, expanding market access, shortening the negative list for foreign investment, and enhancing the opening up of modern service industries. It has already announced the removal of all restrictions on foreign investment access in the manufacturing sector.

The continuously shortened negative list has helped accelerate the opening up of China’s service sector.

In March this year, Standard Chartered Securities China Limited (SCSCL), the first newly-established wholly foreign-owned securities firm in China, officially began operations.

The removal of market access restrictions in China’s financial sector has motivated Standard Chartered Group to accelerate its business expansion in the country.

“The Chinese market has been the largest contributor to Standard Chartered’s global network revenue for many years, and we look forward to the broader opportunities brought by China’s continuous opening-up,” said Jerry Zhang, CEO of Standard Chartered Bank (China) Ltd.

From the initial 190 items to the current 31 items in the national version and 27 items in the FTZ version, the shortened negative list for foreign investment has not only facilitated the growth of foreign-invested enterprises in China but also witnessed China’s accelerated high-standard opening up.

Institutional opening-up in China’s trade sector has also been advanced continuously.

On November 4, 2020, Chinese President Xi Jinping delivered a keynote speech via video at the opening ceremony of the third China International Import Expo held in Shanghai. He noted that China will continue to leverage the pioneering role of pilot free trade zones and free trade ports in steering opening up, and will introduce a negative list for cross-border services trade,

Eight months later, China released its first negative list for cross-border services trade. Shortly after, Khoo Wut Fat William, a lawyer from China’s Hong Kong Special Administrative Region (SAR), registered and obtained certification from the department of justice in south China’s Hainan province, becoming the first legal consultant from Hong Kong SAR to join a Hainan law firm.

This year, China’s Ministry of Commerce rolled out national and pilot FTZ versions of negative lists for cross-border trade in services, extending the negative lists for services trade to the whole country and promoting the tiered opening-up for cross-border trade in services.

In the first five months of this year, the number of newly established foreign-invested enterprises in China increased by 17.4 percent year on year.

China attaches great importance to steadily expanding institutional opening-up and market access. By shortening the negative list for foreign investment and creating a more market-oriented, law-based, and internationalized business environment, China will undoubtedly provide a broader market space and more opportunities of win-win cooperation for countries worldwide.

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China’s new chapter in global innovation

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By Gu Yekai, Liu Yiqing, People’s Daily

At a smart construction project site managed by China State Construction Engineering Corporation, a quiet technological revolution is underway. Amid cranes and concrete, engineers are deploying advanced artificial intelligence (AI) systems that could fundamentally reshape the construction industry.

Li Fengjian, an AI specialistwith Xianyuan Technology, detailed how the company’s latest intelligent system – built on a large model – adapts to complex construction environments.”Engineering machinery equipped with intelligent agents can adjust its operations automatically in response to weather conditions,” Li explained, adding that a spatiotemporal sensing network further enhances the system, providing real-time tracking of both personnel and materials throughout the construction site.

In February this year, Xianyuan Technology rapidly integrated its self-developed model with DeepSeek-R1, effectively blending a general-purpose framework with industry-specific models. This integration, Li noted, has produced a solution capable of delivering expert-level performance in challenging, dynamic environments. The firm is based in the Shanghai Foundation Model Innovation Center, aburgeoning AI incubator that now hosts over 200 innovative enterprises.

China’s technological transformation extends well beyond the construction sector. Overthe past three decades, the country has evolved from its initial forays into internet connectivity to becoming a key player in global digital innovation.

Here, a steady stream of technological innovations are emerging, from the early days of emails and web browsing to the cutting-edge technologies represented by DeepSeek and the dynamic evolution of social media.

Wu Jianping, an academician at the Chinese Academy of Engineering and headof the Zhongguancun Laboratory, pointed out that while China had introduced only one internet standard before 2005, it now contributes to over 200 worldwide. Such strides illustrate the country’s concerted push toward high-level technological self-reliance – a journey marked by both persistence and determination.

Beyond the digital realm, China is makingsignificant inroads in aerospace, new energy, and other high-tech sectors. It has transitioned from being a follower to standing shoulder-to-shoulder with global leaders, and in some areas, even taking the lead. Wu attributed these achievements to a dynamic ecosystem of policy reforms and talent cultivation that encourages creativity and technical expertise at every level.

Amid intensifying international competition, collaborative research and the integration of new technologies with traditional industries are central to China’s high-quality economic development.

Mei Linhai, a researcher at China’s State Key Laboratory of Cognitive Intelligence, remarked that the age of AI calls for continuous exploration. “In this era, everyone is an innovator. Only by persistently pushing the boundaries can we remain at the forefront of both technological and industrial development,” Mei observed.

In the field of general-purpose AI, Mei emphasized that independent innovation is paramount. He advocates for a self-driven industrial ecosystem that leveragesbreakthrough technologies to boost productivity and unlock new possibilities, Mei said.

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Chinese democracy in action:a village bench meeting shapes national law

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By Wei Zhezhe, Liu Botong, People’s Daily

In a modest corner of Jiangmen, south China’s Guangdong province, residents of Weidong village are experiencing firsthand a form of democracy that starts at the grassroots level and reverberates all the way to Beijing.

Wu Tengxin, a local villager who relies on a scooter for daily mobility after contracting polio, recalls a time when the village’s public spaces were ill-equipped for people with disabilities. Now, thanks to a simple suggestion made during a meeting, his everyday life has changed.

In November 2022, a team from a local legislative outreach office – a branch of China’sNational People’s Congress (NPC) – visited Weidong village and set up a “bench-style meeting.” Residents, including the elderly and those with disabilities, gathered to voice their concerns about inadequate accessibility.

Amid the conversation, Wu offered a straightforward proposal: “I hope rural accessible facilities can be improved to make mobility easier for people with disabilities and the elderly.” His words were relayed verbatim to lawmakers.

The response was swift. On June 28, 2023, at the third session of the 14th NPC Standing Committee, legislators passed a law on building a barrier-free living environment. The law stipulates that improvements”shall align with social and economic development levels, coordinate urban and rural progress, and gradually narrow the gap in infrastructure between urban and rural areas.”

Today, Wu observes that the village’s main roads and public squares have been upgraded with accessibility features that make getting around considerably easier.

This episode illustrates what Chinese officials call “whole-process people’s democracy” – a system where citizen input is woven into every stage of policy development.

Jilie Ziri, head of Abuluoha village in Butuo county, southwest China’s Sichuan province, remarked that for young generations in China, democracy has become a lived experience. “Villagers are the masters of village affairs,” he said, emphasizing how active villager participation has injected new vitality into local governance.

Experts point to consultative democracy as a cornerstone of this process. Tao Kaiyuan, vice chairman of the Central Committee of the China Association for Promoting Democracy and vice president of the Supreme People’s Court, underscores the important role of the Chinese People’s Political Consultative Conference, whose members hail from every stratum of society and bring a wealth of expertise and connections.

Their regular forums, field research, and public consultations have created robust channels for citizens to contribute ideas and forge consensus.”This approach gathers collective wisdom and transforms public voices into policy,” Tao said.

Another crucial manifestation is the effectiveness of China’s political party system. Under the leadership of the Communist Party of China, Chinese democratic parties actively fulfill their duties, offering recommendations that often translate into concrete policy decisions. This integrated approach demonstrates the unique strengths of China’s political system and the advantages of whole-process people’s democracy.

Tao emphasized that whole-process people’s democracyhas evolved into an efficient and dynamic democratic practice – one that not only reflects the essence of socialist democracy but also presents a pioneering model of political civilization, contributing Chinese wisdom and solutions to global governance and democratic development.

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Chinese modernization: blueprint for global progress

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By He Yin, People’s Daily

At China’s recent annual “two sessions,” Chinese modernization once again captured global attention. International observers are closely following a range of new measures designed not only to accelerate Chinese domestic transformation but also to unlock fresh opportunities for global development.

They believe that Chinese modernization, built on a foundation of openness and cooperation, will continue to yield global benefits with each new milestone.

Today, China stands as a formidable force in the global economy – accounting for around 18 percent of the global economy and nearly 30 percent of world manufacturing output. Year after year, the nation has contributed about 30 percent to global economic growth. With import and export records with almost all countries and regions designated in the United Nations Statistics Division, the country is a major trading partner for more than 150 countries and regions. In 2024, its exports to over 160 countries and regions saw growth.

Often hailed as the “world’s largest developing country,”the “second-largest economy,””world’s factory,””global market,” and “innovation powerhouse,” China is increasingly viewed as a beacon of stability and progress.

In recent years, high-profile events such as the seventh China International Import Expo – where intended deals exceeded $80 billion – and the establishment of over 1.239 million foreign-invested enterprises have reinforced the nation’s reputation as a vast, dynamic market.

Meanwhile, policies encouraging Chinese companies to “go global” have seen a steady stream of new technologies, goods, and services permeate international markets, knitting the country ever tighter into global value chains and bolstering its commitment to win-win cooperation.

The influence of Chinese modernization is evident far beyond its borders. In the Central African Republic, President Faustin-Archange Touadera has repeatedly screened China’s political documentary Carry the Reform Through to the End for cabinet discussions, while officialsin Uzbekistan are adapting China’s poverty-reduction experience to suit their national context. These moves challenge the assumption that modernization must follow Western models, suggesting that China’s alternative pathway offers a viable route to development.

Beyond economic growth, Chinese modernization is increasingly celebrated for its potential to foster win-win cooperation and shared prosperity.

Under the Belt and Road Initiative (BRI), for example, Kazakhstan secured its first maritime access and Laos launched its first modern railway. Support from the Global Development and South-South Cooperation Fund has propelled over 160 projects, benefiting more than 30 million people. Moreover, China has given all the least developed countries with which it has diplomatic relations zero-tariff treatment for 100 percent tariff lines, signaling its commitment to an open and inclusive global economy.

China’s modernization agenda also tackles global challenges head on. In response to global environmental risks, China advocates for building a community of all life on the Earth. To bridge the digital and AI divide, it has launched the AI Capacity-Building Action Plan for Good and for All to ensure that technological advancements benefit every corner of the globe.

On the security front, China continues to promote dialogue and reconciliation in conflict zones while engaging in multilateral security collaborations, reinforcing its reputation as a nation committed to peace and stability.

By proposing initiatives such as the Global Development Initiative, the Global Security Initiative, and the Global Civilizations Initiative, China is not just charting its own course toward modernization but championing an equal and orderly multipolar world and a universally beneficial and inclusive economic globalization – one that seeks to ensure that no nation is left behind on the path to prosperity.

The global appeal of Chinese modernization is far from accidental. Decades of reform and opening up have accelerated its development while enabling the country to contribute to global governance. On the international stage, it has taken on a leadership role – actively shaping global norms, building a community with a shared future for mankind, and advancing world peace and development. By sharing its successful experiences and technological advancements, the country seeks to help other developing countries chart their own courses toward progress.

With over 1.4 billion people engaged in this modernization journey – a number that surpasses the total population of all developed countries combined – China’s approach is redefining the global modernization landscape. For China, modernization is not solely a national endeavor but a blueprint for global progress – a vision that promises a more inclusive future for all.

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