At present, the TTP, TTIP negotiations feature the shaping of new international investment rules. In response to this circumstance, China is initiating its own IIA negotiations and also changing its foreign investment regime through in-depth reform. Among these reforming measures, the Negative List of Shanghai FTZ can be reckoned as one of the most important and the core to reform the foreign investment regime. Therefore, in order to analyze the legal issues arising from this transformation process, the essence lies in the Negative List itself.Since the Shanghai FTA was established, there have been two versions of its Negative List. But the fact is, this new mode is still in the process of grope. According to the General Plan of Shanghai FTA, part of the overall goal is set to “build Shanghai FTZ into the one with convenient investment environment which accords to the international level after two or three years of experiment.†Currently, with the three-year task past half, the legal issues of the present Negative List need be concluded and suggestions need be made to further promote and popularize the List. The aforementioned are demonstrated in this article with four chapters, which are summarized as follows:Chapter One discusses the driving force and background of the reform. The driving force of the reform is based on the need to break the restrictions deriving from the original foreign investment admission pattern. This original pattern can be reflected in two aspects: the domestic approval procedures imposed on foreign investment and thepost-national treatment granted to foreign investors and their investments by China in its IIAs. Meanwhile, the background of the reform sketches the international investment environment that China is faced with, involving TTP, TTIP and the Sino-U.S. BIT negotiation. It is further pointed out that a new round of investment liberalization is forthcoming, and China should take positive actions to deal with this severe situation that might be brought by the liberalization. In this regard, launching the Negative List of Shanghai FTA can be considered as the very action that China has taken to keep up with the international high standard. In addition, in order to lay the foundation for further analysis of the Negative List, some clarifications are made on its meaning, including the connection between negative list and pre-national treatment, the difference between the negative list and the positive list, and the difference between the Negative List and other lists regulating the matter of foreign investment admission.In Chapter Two, the analysis is focused on the Negative List of Shanghai FTZ itself, aiming at concluding its main problems through analyzing its current practice status. In order to achieve this goal, this chapter firstly states the contents of the current Negative List, such as the structure, sections involved, measures, and the overall system. By comparing the two versions of Negative Lists, it can be found that the 2014 Negative List has been made quite a bit of improvements. On the basis of what mentioned above, this chapter concludes that, although the Negative List symbolizes the great transformation on China’s foreign investment admission pattern, it still needs to be improved due to its complicated measures, relatively low degree of transparency, and lack of definitions of certain terms and other systems in support of the List.Chapter Three looks into the international mature experience in order to explore the solutions of the issues mentioned in the previous chapter. It takes America as an example and finds out that there is no negative list existing in American domestic legal system, however, such list can be traced back to the practice of American IIAs, in which the negative list is functioned as the exception of national investment. Beyond that, the key part of this chapter lies in the examination of the negative list of U.S.-Korea FTA, with the perspectives from its specific layout and the sections chosen. In conclusion, the characters of this negative list are identified as follows:(i) broadening the openness of service industry with prudent limiting measures set at the same time;(ii) high standard of transparency; and(iii) multiple-tier of limitingmeasures in addition to just excluding certain sections.Chapter Four sets out the suggestions for improving the negative list mode in our country. As far as the Negative List of Shanghai FTA is concerned, the future improvement should be made on its industry openness, transparency, and related supporting rules, especially the rules of exceptions. Besides, this chapter also makes proposals for formulating China’s own negative list under the future Sino-U.S. BIT. It is recommended that, based on the lessons drawn from the U.S.-Korea FTA, emphasis be put on the following aspects in this negative list:(i) adopting the common structure used in IIAs practice;(ii) ascertaining the sections to be opened and their classification methods;(iii) making enough rooms for future policies. In the end, brief comments are made on the newly released China Foreign Investment Law(Draft).In the last section, this article concludes that the negative list mode will be the core issue of designing and executing China’s future legal system of foreign investment admission pattern. The ideal goal to be achieved by this mode, is that foreign investors and their investments will be under normative examination within the list and will enjoy true national treatment as equal to their counterparts outside the list. |