(Yicai Global) March 7 -- China aims to improve the business environment for foreign firms by making revisions to its negative list, which specifies the country's sectors where investors are either restricted or prohibited.

China will further open up the agriculture, mining, manufacturing and service sectors to allow wholly foreign-owned firms to participate more effectively, said Ning Jizhe, vice chairman of China's top macroeconomic planner, the National Development and Reform Commission, at a press conference on the sidelines of the 13th National People's Congress yesterday.

The country will shorten its negative list and continue to further open up pilot free trade zones this year, he added.

China will unveil an updated negative list this year to allow foreign firms into more sectors and bring foreign capital into full play in transforming and upgrading traditional industries and developing emerging sectors. Some industries will continue to enjoy tariff exemption for imported equipment and preferential policies for land. Firms investing in western China can enjoy a lower income tax of 15 percent.

Foreign firms will be entitled to pre- and post-establishment national treatment in China, meaning they will be on a more even footing with domestic players. "China will lift all restrictions on foreign investment in fields not on the negative list to ensure equal market access standards for Chinese and foreign firms, which is the pre-establishment national treatment for foreign firms," Ning noted.

"China will facilitate equal treatment for foreign firms in government procurement, standards, industrial policies, science and technology policies, qualification licenses, registration, listing and financing, making up post-establishment treatment," he added.

The under-review draft foreign investment law has provisions on encouraging and protecting foreign investment, stipulating that Chinese law protects the intellectual property of foreign investors and firms, he said. It forbids compulsory technology transfer by administrative means.

China has hosted seven key foreign-funded projects such as BMW Brilliance Automotive in Shenyang, Liaoning province, Tesla's Shanghai plant, BASF's petrochemical base in Zhanjiang, and expects a stream other major ones related to new energy, advanced manufacturing, petrochemicals, electronic information and other fields.

Foreign investment is an important part of the Chinese economy. Against a backdrop of slowly recovering cross-border investment worldwide and the complex and ever-changing trade relations, China's invested 3 percent more overseas last year at USD135 billion (excluding banking, securities, and insurance). At the same time, the number of newly established foreign-invested enterprises in the country has grown nearly 70 percent.

Editor: William Clegg