"The 2017 FTZ negative list reflects China's intention to further open up to and attract additional foreign investment. Although the new list liberalises market access for foreign investment in the abovementioned sectors, foreign investment in critical business sectors such as financial services, education and telecommunications still remain subject to significant barriers to market entry."

"The most important change from the interim measures is that the record-filing regime will also apply to acquisitions by foreign investors of the assets or equity of purely domestic-invested companies. As acquisitions account for about half of the foreign direct investment into China, this is indeed a positive change for foreign investors. Another noteworthy change is that all foreign investors (including minority shareholders) will be required to disclose their ultimate controller when carrying out the record-filing procedure to establish or amend an FIE."

"The draft guidelines, like the draft measures, extend the data localisation requirement to network operators, and not just to CII operators as stipulated under the 2016 Cybersecurity Law. If enacted in its present form, the draft guidelines would greatly enhance the regulatory burden on companies transferring data out of China. In addition, other requirements included in the draft guidelines, such as political and legal assessments of data receiving countries, pose further compliance challenges to businesses operating in China."

"While the measures are targeted at the financial accounts of non-residents, their impact on non-residents is not likely to be material because, under China's foreign currency controls, non-residents have very limited channels for maintaining financial accounts in China. The greater impact by far will be on Chinese residents with financial accounts in other countries and jurisdictions, as the Chinese government, which taxes residents' worldwide income, will automatically receive information about these accounts from the other participants under the Multilateral Competent Authority Agreement (MCAA). The automatic exchange of CRS information will change this situation dramatically and enable the tax authorities to collect more taxes from the foreign income of China's residents."

"The draft measures reflect the Chinese government's deep determination to end the rampant and unbridled environmental destruction of the past 30+ years. We expect the final version of the draft measures to be promulgated, largely unchanged from the draft. Of note are the draft measures' apparently light sanctions for transgressors. We expect this to change within a year or two, with much larger fines, plus revocation of operating licenses, being added to the list of potential penalties."