China opens the telecommunications and television production sectors for foreign investors

In a remarkable move aimed at attracting more foreign investments, the Chinese Organization and Planning Authority announced an updated version of the “negative list”, in which the number of sectors restricted from 117 to 106 was reduced only, according to the Asian newspaper The Business Times.

What is the “negative menu” and why is it an important step?

The negative list is a regulatory tool that defines the sectors in which foreign investors are prohibited or bound. Beijing had launched its first version in 2018, as part of its efforts to control the flow of investments and direct them in line with its economic priorities.
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Economic background: Why is China alleviating its restrictions now?

This step comes at a time when the Chinese economy is experiencing escalating pressure, as a result of poor local demand and real estate debt crisis, as well as a commercial escalation from Washington by imposing additional customs duties on Chinese products.

The most prominent sectors that were opened to foreigners

The National Committee for Development and Reform clarified that the 2025 version aims to reduce the entry threshold and stimulate the dynamics of the market, as restrictions have been reduced in several areas, including: television production, communication services and information via the Internet, pharmaceutical industries and medical devices, and the import of forest seeds
The central government also encouraged local governments to open more sectors such as transportation, logistics services, shipping, and vehicle rental services. On the other hand, some industries, such as unmanned air vehicles, are still on the negative menu to “ensure safe results”.
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China is trying to reassure investors

Last February, China announced its intention to review restrictions on foreign investment, and soon began with intense meetings with multinational companies. These moves come in light of the decline in foreign direct investment by 27.1% during the year 2024, which is the largest decrease since the global financial crisis in 2008.

The IMF reduces growth expectations for China and Asia

The International Monetary Fund reduced its expectations for the growth of major Asian economies for the year 2025, pointing to the escalation of trade tensions and political uncertainty, reducing its expectations for growth in China from 4.6% to 4%, India from 6.5% to 6.2%, and Japan from 1.1% to 0.6%.
On the global level, growth expectations were reduced from 3.3% to only 2.8%, as the fund indicated that the customs duties announced by the United States represented a “major negative shock” of the global economy.

Major financial institutions warn against slowing the growth of China

In harmony with the Fund’s expectations, global financial institutions have reduced their estimates for growth in China, as Goldman Sachs reduced its forecasts to 4% instead of 4.5%, and Natxis Bank reduced its estimates from 4.7% to 4.2%.
The institutions attribute this decline to the escalation of American customs duties and the decline in domestic demand, enhancing fears of more severe economic slowdown in China.

Do Beijing succeed in restoring investor confidence?

Through these reforms, China seeks to accelerate economic openness and restore the confidence of global investors, at a time when the country needs foreign capital to support its growth, and overcome the increasing challenges surrounding its economic environment.