China to ease limits on foreign investment in oil and gas

China is reforming key industries to allow for greater foreign investment, according to state media.

China is easing foreign investment restrictions in sectors that include the oil and gas industry.

Xinhua reported the National Development and Reform Commission of the People’s Republic of China said Sunday sectors including oil exploration and mining are to be deregulated for more foreign capital inflows.

In its new “special management measures” addressing foreign investment, Beijing’s reform commission said the number of foreign investment-related restrictions will decrease from 48 to 40 items. For foreign investment into free trade “experimental” zones, China has decreased the number of restrictions from 45 to 37 items, according to Xinhua.

China refers to these restrictions as the “list of negatives.” The list explicitly states specific bans in industries that are otherwise allowed to receive foreign capital inflows.

Significant changes include a state decision to eliminate all foreign investment restrictions that previously applied to Chinese shipbuilding companies and to Chinese utilities serving cities with populations of 500,000 or greater.

Beijing is also lifting restrictions against foreign investment into call center services, the development of wildlife resources, oil and gas exploration, and the development of molybdenum, tin and other natural resources.

The restrictions will be lifted by the end of 2019, the Chinese commission said.

The new measures are being reported at a time when U.S. President Donald Trump appears to be reversing course on trade restrictions with China.

Analysts say it is too early to tell whether Trump’s decision to allow U.S. firms to buy from Huawei Technologies, after blacklisting the company six weeks ago, will ease trade tensions, CNN reported.

“The temporary agreement does little to resolve the fundamental conflicts over trade issues that broke down talks in May and does not amount to a sustainable solution for Huawei,” the Eurasia Group said.

U.S. tariffs on $250 billion of Chinese goods are in place, and Chinese retaliatory tariffs are still hitting U.S. exports.

ByElizabeth Shim