Opinions of the State Council on the Implementation of the Market Access Negative List System

Guo Fa [2015] No. 55

October 2, 2015

The people's governments of the provinces, autonomous regions and municipalities, ministries and organs directly under the State Council,

The following opinions on the implementation of the market access negative list system (hereinafter the "Negative List System") are issued in accordance with the requirements of the Decision of the Central Committee of the Communist Party of China concerning Some Major Issues concerning Comprehensive Deepening of the Reform and the strategic arrangement of the State Council.

I. Importance of the Negative List System
1. Positioning of the Negative List System
The Negative List System refers to a series of systems and arrangements taken by governments at various levels for administrating the industries, sectors and businesses, etc. in the People's Republic of China where the investments and operations are clearly prohibited or restricted by the State Council via a list (hereinafter the "Negative List"). All the market entities may enter the industries, sectors and businesses, etc. not included in the Negative List on an equal basis in accordance with the law.
2. The implementation of the Negative List System provides an important foundation for the market to play a decisive role in the allocation of resources.
The Negative List System enables the market entities to take more initiatives, facilitates the implementation of the autonomy of market entities and triggers the vigor and enthusiasm of the market, facilitates the organization of the market where the various market entities may use the production factors on an equal basis in accordance with the law and participate in the market competition openly, fairly and righteously, and facilitates the operation of a modern market system characterized by uniformity, openness and orderly competition, so that the market will play a decisive role in the allocation of resources.
3. The implementation of the Negative List System is an intrinsic demand for the government to play its role better.
The Negative List System clarifies the scope of duties of the government, facilitates the further reform of the administrative approval system, greatly restricts the scope of government approvals, innovates the method of government regulation, promotes the ease and convenience of investment and trade, continually improves the efficiency and effectiveness of administration, facilitates the government to apply the sense of rule-of-law and lawful method to the regulation of the market, promotes the process of systematic, standardized and procedure-controlled market regulation, and thus fundamentally promotes the transition of government functions.
4. The implementation of the Negative List System is a necessary measure for building the new economic system characterized by openness.
The implementation of the market access negative list system as well as the foreign investment negative list system facilitates the construction of a modern market system that is in line with the generally accepted international rules, facilitates the construction of a business environment characterized by the rule of law, promotes the orderly and free flow of the international and domestic factors, the highly-effective allocation of resources and the deep integration of the market, gradually promotes our competitiveness in the international market, and is an effective way to promote the reform by opening-up and constructing a more sophisticated system of market economy.

II. General Requirements and Conditions for Application
5. General Requirements
Adhere to the orientation of reform towards a socialist market economy, combine the decisive role of the market in the allocation of resources and the improvement of the government's performance of its duties, integrate the transition of government functions and the innovation of method of administration, coordinate the stimulation of market vigor and enthusiasm and strengthening of market regulation, expand and regulate the market access, simplify and improve the government approval procedures, strengthen and innovate the market regulation, accelerate the construction of a new market access administration system characterized by openness, fairness, orderliness, autonomy of enterprises, equal competition, clear scope of government duties and effective regulation.
The authorities of various districts and departments shall strictly implement the Negative List System. The Negative List System shall be established and implemented, as long as the industries and sectors involve the issue of market access for the investments and operations conducted by various market entities out of free will; when the condition is mature, the existing market access rules administrated in the form of a catalog shall be included in the Negative List uniformly.
6. Classification
The Negative List, including both the prohibited access list and the restricted access list, is applicable to the investments, operations and other market access activities of various market entities out of free will via initial investment, expansion of investment as well as merger and acquisition, etc. As for the items included in the prohibited access list, the market entities shall not enter the relevant market and the authorities shall not examine or approve the market access or handle the relevant procedure; as for the items included in the restricted access list, the market entities may submit an application for the authorities to decide whether to approve the market access; and as for the industries, sectors and businesses not included in the Negative List, all the market entities may enter the market on an equal basis in accordance with the law.
7. Conditions for Application
The investments, operations and other market access activities of various market entities may be prohibited or restricted by qualification of market entities, shareholding ratio, scope of businesses, status of operation, business mode, regional layout, land development and protection and other relevant administrative measures in accordance with the law, regulations and decisions of the State Council, if it involves any of the following fields: relevant industries, sectors and businesses, etc. concerning state safety, including the life and property safety of the people, political safety, land safety, military safety, economic safety, financial safety, cultural safety, social safety, science and technology safety, information safety, ecological safety, resources safety, nuclear safety and safety of new areas; relevant industries, sectors and businesses, etc. concerning the national layout of major productive powers, development of strategic resources and major public interests; relevant industries, sectors and businesses, etc. that may be subject to administrative approvals and involve the qualification of market entities for the investments and operational activities; other situations prescribed by the law, regulations and decisions of the State Council.
8. Major Types of Negative List and Their Application
The negative list is mainly divided into the market access negative list (i.e. the Negative List hereunder) and the foreign investment negative list. The market access negative list is the compliance management measure applicable to both the domestic and foreign investors and constitutes the uniform requirements of market access for various market entities; the foreign investment negative list is applicable to the investments and operations by foreign investors in China and constitutes the special management measure for market access of foreign investment. The foreign investment negative list shall be formulated with the subject of diplomatic talks concerning foreign investment taken into comprehensive consideration, with the relevant rules to be separately prescribed by the State. If the State has entered into a bilateral or multilateral agreement (or treaty), it shall be consistent with the relevant agreement (or treaty).

III. Formulation, Implementation and Adjustment Procedure
9. Principles of Formulation.
The principle of the rule of law. The basic strategy of the rule of law shall be comprehensively implemented during the formation of the Negative List. If any new issue is not prescribed by the laws, regulations or decisions of the State Council and it is really necessary to include it in the Negative List, the relevant authority shall, on the basis of scientific evaluation, propose the formulation or revision of a law, regulation or decision of the State Council in accordance with the legal procedure. The significant issues concerning the national socio-economic development and the issues involving special professional knowledge shall be subject to the decision-making procedures like public participation, expert deliberation, risk evaluation, legality review and collective discussion and decision, etc.
The principle of safety. The formulation of the Negative List must adhere to the general perspective of state safety, observe the laws and regulations on safeguarding state safety and the systems on the safety of various fields of the State, pin great importance to economic safety, safeguard the basic economic system of the State and the order of the socialist market economy, improve the system and mechanism for preventing and resolving the risks of economic safety, protect the key industries, key areas, key sectors, key infrastructures and key construction projects that constitute the lifeblood of the national economy as well as the safety of other significant economic interests.
The principle of gradual progress. The formulation of the Negative List shall take root in the actual situation of the State, make progress gradually and steadily, with general plans made ahead of time and implemented step by step, so as to achieve the duplicable and promotable experience for large-scale promotion. As for the new technology, new products, new industrial status, and new business modes, the authority shall stick to the principle of encouraging innovation and reducing the threshold of businesses, strengthen the provision of systems and policies, and embed regulation in services, rather than including them in the Negative List in a hurry.
The principle of necessity. The matter included in the Negative List must be as simple as possible and definitely necessary. The relevant authority shall not copy the issues prohibited or restricted in the law, regulation or decisions of the State Council into the Negative List literally, or copy the industries, sectors and businesses subject to prohibition or restriction on the investments or operations by market entities into the Negative List literally. The relevant authority shall not confuse the non-market access issues and post-access regulation measures with the market access regulation measures, or prescribe measures generally applicable to market entities, e.g. registration, collection of information, approval of land use, etc., in the Negative List. The relevant authority shall not mechanically apply the conditions for application provided for the Negative List, or include the issues not subject to administration of the negative list.
The principle of publicity. The formulation and adjustment of the Negative List shall embody the principle of openness, fairness and justice, form a stable, transparent and predictable system arrangement, so as to safeguard the right to knowledge and participation of the public. The issues, foundation and result related to the formulation and adjustment of the Negative List shall be announced to the public and facilitate the public review, unless it shall be made confidential in accordance with the law.
10. Procedure of Formulation.
The Negative List shall be uniformly formulated and announced by the State Council; if the local government needs to adjust the Negative List, the relevant provincial government shall report to the State Council for approval. All the relevant departments and agencies that are responsible for administration of market access shall comprehensively clarify the industries, sectors and businesses, etc. that need to prohibit or restrict the investment or operation of market entities, and provide a draft negative list of the department or agency in accordance with the uniform criteria of classification prescribed by the Classification of Industries in the National Economy (if it involves multiple classes in the Classification of Industries in the National Economy or a new status not prescribed in the Classification of Industries in the National Economy, there shall be a special comment); the Development and Reform Commission and the Ministry of Commerce shall summarize and review the draft negative lists to prepare the uniform Negative List and submit it to the State Council for its approval before implementation.
The administrative measures on market access established in accordance with the law, regulations and decisions of the State Council shall be reviewed for their legality, and the evaluation of their rationality, feasibility and controllability shall be conducted in accordance with the principle of enabling the market to play the decisive role of allocation of resources. If it is necessary to include the administrative measures on market access established in accordance with the department rules or documents in the Negative List, the relevant law or regulation shall be formulated or revised in accordance with the legal procedure, or the relevant department shall, after serious deliberation, report to the State Council in accordance with the procedure prescribed hereunder for it to make a decision.
The formulation of the Negative List shall take the difference of development in various districts into full consideration, so as to enhance its operability and feasibility. The provincial government may, on the basis of the uniform Negative List of the State, provide suggestions on its adjustment in line with its local endowment of resources, positioning of function, comparative advantage of industries, relation of cooperation in production, logistics and marketing network, influence upon the ecological environment, etc. and report to the State Council for its approval before implementation. No local government or department may issue any market access negative list or increase or decrease any item of the Negative List without the approval of the State Council.
To formulate the market access negative list, the relevant department shall improve the mechanism of public participation, expert deliberation and government decision-making, take the opinions of the various districts and departments into full consideration, organize the experts to deliberate the necessity and feasibility, and invite comments from the public. If it involves state safety, it shall be submitted to the State Safety Commission for review in advance.
11. Implementation steps.
In accordance with the principles of carrying out pilot programs and gradual expansion, from December 1, 2015 to December 31, 2017, the Negative List System will be launched on a pilot basis in some areas to accumulate experience and gradually improve. We will explore the formation of a uniform nationwide market access negative list and an appropriate institutional mechanism, and the unified nationwide market access negative list system will be formally introduced from 2018. The NDRC and MOFCOM shall take a leading role in proposing a draft market access negative list and the pilot areas, after submitting the draft to the CPC Central Committee and the State Council for approval, shall organize the launching of the pilot work. Provincial governments in pilot areas shall, based on the draft market access negative list, propose pilot schemes for the Negative List System, and then submit the pilot schemes to the State Council for approval before implementation. Any matters concerning the suspension of application of the relevant laws, administrative regulations or the provisions thereof, shall be governed by statutory procedures.
Provincial People's Governments in pilot areas shall, as per the requirements of the Work Plan for the implementation of the Pilot Reform of the Market Access Negative List System (see annex), strengthen the leadership and coordination, improve the mechanisms for process management, early warning, information feedback, and dynamic performance appraisal, to ensure substantive progress in reform. Relevant departments shall strengthen their work connection to pilot regions, and first implement the reform measures for optimizing the market access management in the pilot areas. The NDRC, MOFCOM and other departments shall strengthen their guidance and supervision, discover and solve various problems in the reform in a timely manner, and report important matters to the State Council without any delay.
12. Adjustment procedures.
After the implementation of the Negative List System, adjustments may be made to the market access negative list in a timely manner in accordance with the principles of administrative streamlining and decentralization, proper balance between delegation and control, and optimization of services, based on the overall progress in the reform, economic restructuring, and revision of laws and regulations. With the authorization of the State Council, the NDRC and MOFCOM shall lead in the establishment of cross-sectorial deliberation and coordination mechanism, be responsible for the routine work in implementing the Negative List System, and organize the carrying out of third-party assessment. Any adjustments to significant items and addition of administrative measures for market access shall be approved by the State Council. Should any adjustments be made to the administrative measures for market access as per laws, administrative regulations and the decisions of the State Council, or adjustments to technical, descriptive and non-substantive content and reduction of administrative measures for market access, the departments concerned shall propose suggestions for adjustments, upon being determined by the deliberation and coordination mechanism after examination, and submit adjustments to the State Council for the record. Any matters relevant to national security shall be first reported to the National Security Commission of the Communist Party of China for examination.

IV. Way of Confirmation and Connectivity with Existing Systems
13.Bridge the market access negative list with the list of items subject to administrative approval.
The introduction of a market access negative list shall be coherent with the list of items subject to administrative approval, and the restrictions on the industries, fields and businesses that are invested and managed by market players in the list of items subject to administrative approval shall in principle be incorporated in the market access negative list. Items not included in the Summary List of Items subject to Administrative Approval of all the Departments of the State Council and items related to market access that have been canceled shall not be included in the market access negative list, and other qualified items after examination in the negative list shall be set out in the market access negative list. Where the State Council decides to cancel, add or adjust items subject to administrative approval in future, the market access negative list shall be directly connected with such items.
14. Bridge the market access negative list with the Catalog for Guiding Industry Restructuring.
According to the requirements with respect to "prohibiting investment in projects falling into the eliminated category" and "prohibiting investment in new projects falling into the restricted category" in the Decision of the State Council on Promulgating the Interim Provisions on Promoting Industrial Structure Restructuring (Guo Fa [2005] No. 40), projects falling into the eliminated category and new projects falling into the restricted category set forth in the Catalog for Guiding Industry Restructuring shall be directly cited in the prohibited access list and will not be itemized. The departments concerned shall adapt to the industry restructuring and new products and technologies emerging in an endless and ever-changing trend, and timely revise the Catalog for Guiding Industry Restructuring. Should subsequent amendments be made to the Catalog for Guiding Industry Restructuring, the market access negative list shall be directly connected with such amendments.
15. Bridge the market access negative list with the Catalog of Investment Projects Subject to the Approval of the Government.
Projects subject to the approval system (with the exception of projects specifically for foreign investment and overseas investment, which are provided otherwise) set forth in the Catalog of Investment Projects Subject to the Approval of the Government, shall be directly cited in the prohibited access list and will not be itemized. The departments concerned shall, in accordance with the overall planning for comprehensively deepening reform, accelerate the formation of decisions on further institutional reform of investment and financing, and of administrative regulations on investment projects subject to government approval and filing, and adjust the Catalog of Investment Projects Subject to the Approval of the Government as appropriate. Where the State Council decides to make amendments to the Catalog of Investment Projects Subject to the Approval of the Government in future, the market access negative list shall be directly connected with the amended Catalog of Investment Projects Subject to the Approval of the Government.
16. Bridge the market access negative list with market access administrative items established as per laws, administrative regulations, and decisions of the State Council.
Administrative measures for market access set as per laws, administrative regulations and decisions of the State Council, after examination, shall be categorized into the prohibited access list and restricted access list. The departments concerned shall, according to the formation and revision of laws and administrative regulations and documentation clean-up of the State Council, timely make adjustments according to the market access negative list. Among others, where the laws, administrative regulations, and the decisions of the State Council do not explicitly define an item as a pre-condition, it shall no longer be a pre-approval item; where laws, administrative regulations, and decisions of the State Council explicitly define an item as a pre-condition, unless the reservation is really necessary, the item shall not be a pre-approval item by modifying the laws, administrative regulations, and decisions of the State Council.

V. Safeguards
17. Establish and improve an access mechanism adaptable to the Negative List System.
With respect to the industry, fields and businesses falling outside of the market access negative list, all types of market players have equal access to such industries, fields and businesses according to the law, without seeking approval from the Government. The authority that should be delegated to companies shall be fully granted, so that matters falling outside of the market access negative list are independently determined by market players according to the law. Adhering to the proper balance between delegation and control, the departments concerned shall fully take into consideration national security, the environment, public interest, safety production, and other aspects, improve the indicator system for comprehensive consideration, implement the primary accountability of companies, tighten supervision according to the law, develop an accountability mechanism for security review and regulation, and form a new pattern of business autonomy, industry self-regulation, and social supervision. With respect to matters falling into the market access negative list, we can explore the implementation of market access with commitments depending on the circumstances, and further strengthen the implementation of notification filing, access information publication and other supporting measures. Market access with commitments means a situation in which all types of market players commit to fulfilling legal obligations, undertaking social responsibility and maintaining social integrity, and can access the market after submitting a written letter of commitment to the relevant authorities; notification filing means all types of market players, after having conducted investment and operations, fulfill an obligation of notification filing with the departments concerned; access information publication means that all types of market players shall fulfill the obligations set forth in the Interim Regulations on Enterprise Information Publication according to the law.
18. Improve the approval system adaptable to the Negative List System.
For restricted access matters, governments at all levels and the departments concerned shall, according to the approval authority, regulate the approval authority and responsibility and standards, and as per the requirements set forth in the Circular of the State Council on Regulating the Administrative Approval Operation of Departments of the State Council and Improving Works related to Administrative Approval (Guo Fa [2015] No. 6 ) and the Circular of the State Council on Issuing the Work Plan for Simplifying Approval Items, Standardizing Intermediary Services, and Implementing Online Parallel Approval for Enterprise Investment Projects (Guo Ban Fa [2014] No. 59), streamline the pre-approval process and achieve the optimization of the approval process, standardized procedures, openness and transparency, and clear authority and responsibility. Among others, we shall legally regulate and tighten the pre-approval involving national security, safety production, etc. Governments at the province, city and county level in all regions are encouraged to implement the administrative approval list of market access items (restricted category), clarifying the title of approval, basis, applicable scope, implementing subject, conditions for handling approval, application documents and requirements, handing procedures, and time limits. We shall accelerate the development of an online joint approval monitoring platform with "uniform specifications, parallel operating, information sharing, efficiency and convenience, sunshine operations, and whole-process monitoring," and achieve the "notification, acceptance, handling and monitoring of all approval items within one network."
19. Establish and improve the regulatory mechanisms adaptable to the Negative List System.
All departments in all regions shall, in line with the principles of performing their respective duties and law-based regulation, strengthen pre-, mid- and post-supervision of the investment and operations carried out by market players. In line with the principles of decentralization, law-based regulation, fairness and transparency, and community co-governance, they shall change the regulatory concept, innovate the regulation pattern, improve the efficiency of regulation, optimize the regulation of market conduct after the access, and ensure that matters falling outside of the market access negative list are subject to scientific regulation. The departments concerned shall strengthen the introduction, adjustment, and administration of development strategies, development plans, industrial policies and standards and norms, set a strict "bottom line" in accordance with the law, and strengthen middle- and post-supervision. Governments at the province, city and county level in all regions are encouraged to implement the regulatory list, clarifying regulatory matters, regulation basis, regulators, regulatory authority, contents and methods of regulation, regulatory procedures, and penalties, and build regulatory mechanisms integrating the legal constraints, administrative supervision, industry regulation, public participation, business credit, and self-regulation. Promote industry associations and chambers of commerce to establish and improve self-regulatory codes, self-disciplinary conventions, and codes of professional ethics for industry operations, and establish and improve industry self-regulation mechanisms adaptable to the Negative List System.
20. Establish and improve the social credit system and the incentive and disciplinary mechanism adaptable to the Negative List System.
Perfect the social credit system, improve the enterprise credit information publication system, and incorporate market players' credit records into the website "Credit China," and the nationwide uniform credit information sharing and exchange platform, serving as an important basis for all kinds of market entities engaging in economic activities such as production, investment, circulation, and consumption. Promoting the establishment of the pre-access credit commitment system for market players, and require them to make a public commitment to the community that they shall voluntarily be subject to punishments and restrictions if they conduct business in contravention of the law or default on credit. Credit commitments shall be included in market players' credit records. Improve the mechanism for the encouragement of good credit and punishment of bad credit, carry out classified and dynamic administration based on market players' credit standing, support and reward market players keeping good credit and impose restrictions in respect of investment and financing, land supply, bidding, and financial funding arrangements on market players default on credit according to the law and regulations. Market players which commit serious violations of the principle of market competition, disrupt the economic order in the market, and infringe the legitimate rights and interests of consumers, employees and other business operators shall be subject to "blacklisting," and those which seriously break the law or credit shall be barred from accessing the market.
21. Establish and improve a compatible information publication system and information sharing system for the Negative List System.
On the back of the enterprise credit information publication system, improvements shall be made to the annual report system, the instant information publication system, the system for spot checks on published information, the catalog of abnormal operations, the list of enterprises with grave breaches of the law, and other systems regarding enterprises. The information generated in the course of the production and operation activities carried out by enterprises, as well as the information generated in the course of the performance of duties of government departments which is capable of reflecting the conditions of any enterprises shall be published timely in accordance with the Interim Regulations on the Publication of Enterprise Information and other relevant regulations. Enterprises that fail to timely publish information, withhold information, or publish false information shall be subject to measures of credit constraints and be restricted or banned from access, in accordance with the law, in aspects such as government procurement, project bidding and tendering, and transfers of state-owned land. All regions and departments shall, as per the overall requirements of the State, promote the development of credit information systems in their respective administrative regions and fields, and use the unified national credit information sharing and exchange platform to achieve information connectedness and sharing.
22. Improve the corresponding legal system for the Negative List System.
The implementation of the Negative List System requires equal emphasis to be placed on the revision of "old laws" and the establishment of "new laws." The relevant departments shall, in accordance with the statutory procedures, carry out an overhaul of the laws, regulations, rules, regulatory documents, and the various administrative approval procedures concerning the access to, and the investments and operations in various markets, and as for those that need revising or abolishing, they shall be revised or abolished timely or suggestions shall be made for their revisions or abolition. Items not included in the Negative List shall be timely canceled, or revised in respect of the basis of their existence. Beyond any existing laws, the relevant law shall be referred by the State Council to the National People's Congress or its Standing Committee for revision or be suspended from effect, before its re-issue to society; beyond any existing administrative regulations, the relevant administrative regulations shall be referred by the State Council to the National People's Congress or its Standing Committee for revision or be suspended from effect, before their re-issue to society. Meanwhile, efforts shall be made to speed up the relevant legislation to match the Negative List System to ensure the rule of law with regard to the purviews for market access administrative measures, as well as a legal basis for interim and ex-post regulation and supervision.

VI. Speed up the Relevant Institutional Reforms and Institutional Construction 23. Establish a compatible investment system for the Negative List System.
The investment projects of any enterprises, except for those concerning national security or ecological security and those involving the State's major allocation of productive forces, strategic resource development, or vital public interests, shall be decided by the enterprises at their own discretion and no longer be subject to government approval. The NDRC shall, as per the requirements of the State Council, reform the approval system for the investment projects of enterprises and at the due time, revise, issue and implement, pursuant to procedures, the Catalog of Investment Projects subject to Government Approval, so as to minimize the scope of investment projects of enterprises subject to approval and achieve parallel online administration of project approvals. Departments in charge of planning, land and resources, environmental protection, technologies, safety regulation and others, shall increase the connectedness among them, step up their regulatory efforts, and implement access control in areas such as environmental protection, resource conservation, technology, and safety standards. The same approval or record-filing procedures applicable to domestic investors shall be applied to, under the principle of national treatment, the fixed asset investment projects of foreign investors.
24. Establish a compatible business registration system for the Negative List System.
The tasks are to further reform the commercial system, speed up the implementation of the "Consolidating Three Certificates into One" and the "One License, One Code" policies, and promote the system of unified social credit codes for legal entities and other organizations. Matters that are subject to pre-approval shall be reduced in number and streamlined, and the number of matters for which an accreditation of qualifications is required shall be reduced, and no market entities shall be restricted from accessing and carrying out voluntary investment or business acts in any sectors other than those prohibited or restricted from access by laws, administrative regulations, or the decisions of the State Council. In terms of the existing administrate measures concerning market access, those that have no basis in any law, administrative regulations, or decisions of the State Council shall be systematically canceled.
25. Establish a compatible administrative system for foreign investments for the Negative List System.
The departments concerned shall expedite their development of negative lists for foreign investments on the basis of the principle of national treatment and the negative list management model. The licensing procedures for investment areas for foreign investors shall be gradually streamlined in accordance with the requirements for standardization and facilitation, and efforts shall be made to explore the implementation of a one-stop approval process to reduce the licensing steps. In light of the need to safeguard national security, speedy efforts shall be made to improve the security review system covering foreign investments. Any foreign investments that concern national security shall be subject to a security review under the national security review system and in accordance with the relevant measures. With the strengthening of interim and ex-post supervision and regulation and the establishment of foreign investment information reporting system and a foreign investment information publication system, the goal is to create a whole-process regulatory system covering foreign investments that features information sharing and coordinated regulation among government departments, and the participation of the public in the supervision.
26. Create a compatible market environment featuring fair trade and fair competition for the Negative List System.
The departments concerned shall sort out and abolish the various regulations and practices that restrict the decisive role of the market in the allocation of resources or obstruct the development of a unified national market and fair competition, ban and sanction the various illegal implementations of preferential policies, and crack down on local protectionism, monopoly and unfair competition, so as to prevent the relevant policies from obstructing the development of a unified national market and unfair competition. The series of systems and mechanisms concerning the definition, operation, and protection of property rights shall be improved to offer protection, in accordance with the law, to all kinds of property rights including real rights, creditors' rights, stock rights, and intellectual property rights. Concrete measures for the protection of equal and legal access of all types of market entities to franchised natural monopoly industries shall be developed with an emphasis on equal rights, equal opportunities, and equal rules, the abolition of the unreasonable regulations concerning various non-public sectors of the economy, and the elimination of various recessive barriers.

All regions and departments shall gain perceptions from the high ground of advancing the governance systems and capabilities of the State so as to fully realize the importance and urgency of the implementation of the Negative List System, successfully perform the job of developing and implementing market access negative lists, speed up the development of the relevant policies and supporting systems, and be quick to discover and solve budding, tendentious, and potential issues to ensure the efficacy of this reform.

Appendix: Work Plan for the Implementation of the Pilot Reform of the Market Access Negative List System

Article 1 To meet the requirements to "implement a unified market access system based on the development of negative lists to allow equal and legal access of all types of market entities to sectors not included in the negative lists" set forth in the Decision of the Central Committee of the Communist Party of China on Several Major Issues concerning a Comprehensive Deepening of the Reform and the requirement to "reform the market access system" set forth in the Several Opinions of the State Council on Promoting Fair Competition and Maintaining Normal Order in the Market (Guo Fa [2014] No.20), the State Council has decided to carry out a pilot reform of the market access negative list system in certain regions. This Plan is formulated so that this reform can be carried out in a correct, coordinated, and orderly way.

Article 2 The term "market access negative list system" refers to a series of institutional arrangements, wherein the State Council specifies the industries, sectors, and businesses prohibited or restricted from investment or operation within the territory of the People's Republic of China by way of lists which are to be implemented, with the adoption of corresponding regulatory measures, by all levels of governments in accordance with the law. All types of market entities shall have equal and legal access to any industries, sectors, and businesses not included in the market access negative lists.

Article 3 This Plan shall be applicable to the regions approved by the State Council to carry out the pilot reform of the market access negative list system. Regions not covered by the pilot reform shall carry on with the current regulatory model.

Article 4 The pilot regions shall, by following the principles of streamlining of administration and delegation of powers, regulation by law, fairness and transparency, parity of authority and responsibilities, and social co-governance, handle the relationship between government and market and bring into play the decisive role of the market in the allocation of resources and better play the role of government. The development of market access negative lists shall be based on the principles of rule of law, safety, incremental progress, necessity, and openness.
The pilot regions shall make institutional innovation their primary tasks and the development of replicable, transferable institutional experiences the basic criteria.

Article 5 The provincial people's governments of the pilot regions shall, on the basis of the draft market access negative list (for trial implementation) developed after a compilation and review process led by the NDRC and the MOFCOM, develop their own proposals of negative lists and submit the proposals for the approval to the State Council before their implementation.
While exploring the development, implementation, and procedural adjustments in regard to the negative lists, the pilot regions shall continue to carry further the relevant reforms, establish and improve their market access mechanism, approval mechanism, regulatory mechanism, social credit system, reward and penalty system, information publication system and information sharing system, investment mechanism, business registration system, and administrative system for foreign investments so as to create a market environment featuring fair trade and fair competition and offer suggestions on the improvement of the corresponding legal system for the Negative List System.
During the period of the pilot reform, no market entities, whatever their types, shall invest in any industries, sectors, or businesses listed with prohibited access in terms of investment or operation; and for all types of market entities, where they invest in any industries, sectors, or businesses listed with restricted access in terms of investment or operation, they shall follow the relevant provisions of laws, administrative regulations, or decisions of the State Council and can only enter into the market in question after gaining approval or other types of administrative affirmation. All types of market entities shall have equal and legal access to any industries, sectors, and businesses not included in the market access negative lists. Emphasis shall be put on the combination of deregulation and control, and the relevant departments shall take into overall account various factors including national security, ecological environment, public interests, and work safety, improve the index systems for overall performance evaluation, apply the first responsibility policy to enterprises, step up regulation efforts in accordance with the law, and establish a security review regulatory and accountability mechanism so as to create a type of new arrangements featuring government regulation, industries' self-regulation, and social supervision. As for matters not included in the market access negative lists, differentiations can be made between different circumstances and the implementation of other kinds of market access such as conditional access can be explored, along with the further strengthening of the implementation of the record filing, market access information publication, and other supporting measures.
During the period of the pilot reform, the provincial people's governments of the pilot regions shall, on the basis of the progress of the reform and the prominent issues reported by any market entities, submit suggestions on the adjustment of the negative lists for approval of the State Council before their implementation.

Article 6 During the period of the pilot reform, the provincial people's governments of the pilot regions may, based on the needs in connection with the implementation of the Negative List System, temporarily adjust, subject to the authorization or approval of the State Council, the Guiding Catalog for the Adjustment of Industrial Structures, the Catalog of Investment Projects subject to Government Approval, and other relevant regulations. The statutory procedures shall be followed when a suspension from effect of any relevant laws or administrative regulations or the relevant provisions of such laws or regulations is involved.

Article 7 The provincial people's governments of the pilot regions shall step up their organizing, leadership, and planning and coordinating efforts, establish the work mechanisms for process management, alert and early warning, information feedback, and dynamic performance evaluation, and improve the supporting policies and measures to ensure that the reform achieves substantial progress.

Article 8 The NDRC and the MOFCOM shall lead and be responsible for the guidance, coordination, motivation, and evaluation and other work associated with the pilot reform of the Negative List System and shall timely report any major situations and major issues to the State Council. The relevant departments shall enhance the connectedness of their work with that of the pilot regions, and try out any reform measures that help improve market access administration first in the pilot regions.

Article 9 The pilot regions shall timely sum up and learn from experiences and be quick to discover budding, tendentious, or potential issues in order to correct any deviances or improve the relevant policies, make progress in a solid way, and ensure that the completion of all reform tasks remains on schedule.
The provincial people's governments of the pilot regions shall submit a pilot reform report to the State Council on a regular basis. A midterm evaluation report shall be submitted within a month after one year of the implementation of the pilot reform; a summary report shall be submitted within two months after the completion of the term of the pilot reform.
During the period of the pilot reform, the NDRC and the MOFCOM shall lead and organize the conduct of third-party evaluations to enable an objective investigation and overall evaluation of the pilot reform in respect of its implementation and effect, the experiences learned, the existing issues, and the effect factors. When conducting the midterm and the final evaluations, the pilot regions shall give priority to the adoption of third-party evaluations.

Article 10 The interpretation of this Plan shall rest with the NDRC and the MOFCOM.

Article 11 This Plan shall come into force as of December 1, 2015 and remain in force till December 31, 2017.