Summary:
Hainan Free Trade Port was established as China’s most liberalised foreign investment regime in 2020, though its initial advantages have diminished as other zones have achieved similar liberalisation levels. A comparative analysis of foreign investment negative lists reveals that Hainan’s policy advantages in foreign investment has become less pronounced.
When positioned as China’s flagship liberalisation experiment, Hainan FTP launched with a streamlined 27-item negative list compared to 30 for Pilot Free Trade Zones and 33 at the national level. This differential provided foreign investors with broader sectoral access in Hainan than in any other region across China.
Since 2020, however, Hainan’s negative list has remained static whilst other frameworks have undergone progressive liberalisation. PFTZ regimes have now matched Hainan’s 27 items, and national-level restrictions have been reduced to 29 items—demonstrating the most significant proportional improvement across the three tiers. Under the negative list approach, fewer restrictions translate directly to enhanced market access, highlighting how other zones have advanced whilst Hainan has maintained its original position.
Highlights:
1. Hainan FTP started with a clear foreign investment advantage in 2020, restricting 27 sectors compared to 30 for PFTZs and 33 nationally.
2. By 2024, Hainan’s foreign investment restrictions match those of PFTZs at 27 items, as Hainan’s negative list remained static while PFTZ frameworks reduced their restrictions.
3. The national list achieving the most significant improvement in foreign investment access from 33 to 29 restricted sectors, indicating broader liberalisation progress across China.
Article By XU Ni, Scarlet
Graphic By YAN, Bowen
ACI Perspectives 