Taking a more active and effective approach to using foreign capital was included in the Government Work Report this year as a major economic task. Premier Li Keqiang said the government will actively work to explore the management model for pre-establishment national treatment and a negative list.

The essence of pre-establishment national treatment is to provide national treatment for foreign capital during the entry stage, which means the capital importing country should provide foreign capital treatment that is no less than domestic capital in the pre-establishment stage.

However, there are necessary exceptions to such treatment. Internationally many countries adopt a negative list to restrict foreign capital from entering some key industries or fields. All fields not on the negative list are accessible to foreign capital without governmental approval in advance.

Pre-establishment national treatment and a negative list are common international practice, but they are new for China. In the future China will continue to open up its economy to the outside world, and give more freedom to foreign investment in China.