Beijing welcomes Wall Street, but bans Hollywood, in ‘openness for business’ push amid trade spat with Trump

Beijing on Thursday further reduced restrictions on foreign companies, at a time when Washington has stepped up tariffs on Chinese merchandise and threatened investment curbs.

The 2018 negative list, which details specific areas foreign companies are banned or restricted to invest in, was shortened to 48 items from 63 last year, according to a circular jointly released by the National Development and Reform Commission and the Ministry of Commerce.

While some measures have been announced, such as allowing foreign control of financial institutions in the hope of luring Wall Street money to the country, foreign investors will for the first time be allowed to build ships or produce rare earth metals under the new regulation due to take effect from July 28.

China’s foreign ownership cap on new vehicle plants will be removed in 2018 to pave the way for foreign automakers such as Tesla to have a wholly-owned plant in China, while foreign ownership restrictions on sedan plants will be removed by 2022, according to the document.

But sectors like new production, distribution, and broadcasting will remain off limits for foreign investors. Hollywood has been trying to penetrate China’s movie market, but Beijing will continue to ban any foreign investments in studios and film distribution. The only areas where foreign investors are allowed are cinema construction and operation. However, these must be joint ventures, in which the majority stake is controlled by Chinese, according to the “negative list”.