The negative list concept can only be understood in the context of the development,
the historical development of China's foreign investment system.
In the past, all foreign investments had to go through a very cumbersome approval,
registration and verification process,
and from the foreign investors' point of view,
this was really very troublesome because you never really
knew - although there have been rules and regulations,
but you never really knew whether your project would be approved.
The negative list approach,
which was introduced during China's negotiations
with the United States regarding an investment treaty,
is a different approach.
It implies that, as a matter of principle,
foreign investors obtain national treatment,
they are treated like domestic companies,
except for certain industry sectors,
which are listed in that negative list.
If you're listed, if your industry is listed in that particular list,
then your investment will either be
subject to restrictions or it will not be allowed at all.
China has not comprehensively introduced such a list yet.
The current system is still the approval,
verification and registration system.
But, in some areas,
in the free trade zones of Shanghai, Guangdong,
Tianjin and Fujian, the concept was introduced on a pilot basis.
Now, just three days ago,
the Standing Committee of the National People's Congress
has adopted a resolution according to which,
starting from October 1 of this year - that is
2016 - the approval and registration requirements
will be abandoned and a new approach would be taken.
Foreign investors only have to register their investments,
unless they are subject to some kind of restriction,
which is set out in a negative list,
which is still to be published.
Now this negative list is not out yet,
but we know it should come and should be available as of October 1 this year.
The interesting question is whether this negative list, how it will look like.
We don't know this at this point of time.
If it is a very comprehensive list,
which covers lots and lots of areas and industry sectors,
then the negative list concept, which has,
by the way, been adopted by about 80 other countries worldwide as well,
will be worse from
the foreign investors' point of view as compared with the current system.
The trend or indications,
implications given by lawmakers,
by policymakers show that China is eager to liberalize
its foreign investment system so as to attract more foreign investments into the country,
so I'm quite hopeful that in the future that the negative list won't be that harsh.
Having said that - and you have to allow me one or two more sentences -
the removal of the approval and registration and verification system
does not necessarily mean that we automatically have
a liberalized investment system because
those restrictions that are being removed could be reintroduced through other tools.
I've already mentioned the negative list,
but it could also be introduced through merger control tools,
through the state security check system,
through an annual inspection system,
which is about to be introduced,
so we have to wait and see how this all works out.
And one final remark.
I just mentioned that the lawmakers aim at
introducing this new system as of October 1, 2016.
I'm a bit doubtful whether this tight timeline can be kept,
but at least this is a move into the right direction.