Page 80 - 2020 White Paper on the Business Environment in China
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0 White Paper on the Business Environment in China

Additionally, in December 2018, the National Where a foreign-invested enterprise finances a
Development and Reform Commission and the project pursuant to the foregoing paragraph, the
Ministry of Commerce issued a newly revised relevant departments and financial institutions
Negative List of Market Admission (2018 Edition) shall conduct the same relevant procedures with
based on the Opinions on the Implementation the same conditions and procedures as those for
of the Negative List System for Market Admission domestic invested enterprises.
(“List”) provided by the State Council, including
four prohibited admissions and 148 restricted Foreign-invested enterprises may borrow
admissions. Whether foreign investors,on entering foreign debt in accordance with the relevant
the market in China, shall be governed by this regulations of the State.”
List or by the Special Management Measures for
Foreign Investment Admission (“Negative List”) On October 8, 2001, the China Securities
(2018 Edition), remains to be clarified by relevant Regulatory Commission (CSRC) issued the Several
government entities. Opinions on Issues related to Foreign Investment in
Listed Companies, which allows qualified foreign-
Section 3. Equity between Foreign and invested enterprises to list and issue shares
Local Investors or invest in listed companies. According to the
Guidelines on the Application of Basic Standards
This chapter of the Foreign Investment Law aims for Listing Conditions of National Equities Exchange
to guarantee that foreign-invested enterprises may and Quotations (NEEQ) System (Trial), foreign-
equally participate in market competition, and may invested enterprises may apply for listing on
abide by the same rules as domestic investment NEEQ, provided that they are required to provide
enterprises, including Article 9 (Equal Application establishment approval documents issued by
Policy), Article 15 (Equal Application of Mandatory relevant commercial departments. In January
Standards), and Article 16 (Fair Participation in 2017, the State Council issued the Notice on Several
Government Purchases). On the other hand, Measures to Further Open up and Positively Use
provision for this portion of the Foreign Investment Foreign Investment (“Several Measures”). The Several
Law provides guidance on how to encourage and Measures prioritizes creation of the environment
direct foreign investment according to the law, of fair competition. Moreover, it provides that
such as Article 13 (Experimental Policies in Some foreign-invested enterprises may be listed on the
Regions), Article 14 (Preferential Treatment given main board, Small and Medium Enterprises (SME)
to Certain Industries, Fields and Regions pursuant board, Growth Enterprise Market (GEM) and NEEQ
to Laws and Regulations) and Article 18 (Policy and pursuant to law, and may fundraise by issuance
Measures for Promotion and Facilitation within of company bonds, corporate bonds, convertible
Statutory Authority). credit rights, and use of financing tools of non-
financial company debts. The issuance of Several
The Foreign Investment Law, Article 17 specifies Measures means that foreign-invested enterprises
that foreign-invested enterprises may finance will be provided a more open and fair investment
investments by public issuance of shares owned, environment. The new Foreign Investment Law
corporate bonds and in other manners pursuant allows foreign-invested enterprises to finance their
to law. entities by public issuance of shares, corporate
bonds and in other ways pursuant to law.
The Implementation Regulations, Article 19
provides that “Foreign-invested enterprises may, Prior to the implementation of the Foreign
pursuant to law, finance investment in China Investment Law, there have been relatively few
within or outside of China, by issuance of stocks, cases of foreign-invested enterprises listing its
corporate bonds, public or private issuance of shares on an exchange in China. People in China
other financing tools, providing loans to financial also wrongfully assume that the securities of
institutions, and in other manners. foreign-invested enterprises cannot be listed on
exchanges in China, or can face heavier burdens
in listing in China versus domestic enterprises.

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