China’s first negative list in cross-border service trade comes into effect today

August 26, 2021August 26, 2021 Patrick 1536 ViewsFeatured mp 8 min read

The “Special Administrative Measures for Cross-border Service Trade in the Hainan Free Trade Port (Negative List) (2021 Edition) will come into effect today, August 26th. This is China’s first negative list in the field of cross-border service trade.

The “negative list” issued by the Ministry of Commerce uniformly lists the special management measures for overseas service providers to provide cross-border services (through cross-border delivery, overseas consumption and natural person movement) in terms of national treatment, market access, local presence and cross-border financial services trade.

It is applicable to the Hainan free trade port and covers the whole of Hainan Island.

Unlike in the past in various industries, where opening arrangements were made on a piecemeal basis, the “Negative List” clearly listed 70 special management measures in 11 categories for overseas service providers.

In all areas not on the list, the Hainan Free Trade Port will treat domestic and foreign service providers equally and have equal access, with greater openness, transparency, and predictability.

A spokesperson in charge of the Ministry of Commerce stated that “the introduction of the “Negative List” is an important deployment made by the Party Central Committee and the State Council. It is an important measure for China to promote high-level institutional opening up. A high-level open economy is of great significance.”

He also stated that “the negative list is an important reform of the existing management mode of service trade and a concrete move in promoting the reform of “release, management and service”; we have made active opening-up arrangements, relaxed access restrictions in the field of trade in services, and made relatively high-level opening arrangements in the fields of professional services, transportation and finance. The degree of openness is not only higher than China’s WTO commitments, but also higher than the corresponding areas of China’s major free trade agreements in force.

“Reflecting the characteristics of Hainan, focusing on giving full play to the important role of the Hainan free trade port in building a new development pattern, a series of opening measures have been taken, such as opening up the restrictions on foreign yachts entering and leaving the Hainan free trade port and applying for pilotage, which will help to cultivate new advantages of cooperation and competition with Hainan and promote the high-quality development of the Hainan free trade port.”

“The Negative List retains the necessary special management measures. Hainan will earnestly assume the main responsibility, speed up the establishment of a complete supporting management system, strengthen cross-border service trade statistics, monitoring and early warning, and firmly hold the bottom line of no regional systemic risks.”