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China to promote utilization of foreign investment

Updated: Jun 15,2018 8:17 PM

The State Council released on June 15 a circular on measures to effectively utilize foreign investment and promote high-quality development of the economy.

The steps include lowering market threshold, deepening administrative reform, promoting high-quality investment, creating a high-standard business environment, optimizing investment layout, and enhancing the role of national development zones, according to the circular.

To ease market access in a large scale, the nationwide practice of pre-establishment national treatment and negative list on foreign investment will be improved.

The special administrative measures on foreign investment nationwide and in free trade pilot zones, known as “negative list”, will be revised and published before July 1, 2018, aiming to enhance opening-up in an all-around way.

The circular also stressed further opening-up in the financial sector, services sector and sectors such as agriculture, mining and manufacturing.

It called for efforts to ease restrictions on setting up foreign financial institutions, revise regulations related to Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional Investors (RQFII), develop the market of crude oil futures, and attract overseas trader in iron ore futures trading.

The administrative reform will be deepened for foreign investment facilitation, according to the circular. Provincial-level governments will be entitled to review registration and modification of foreign-invested enterprises investing less than $1 billion in sectors included in the negative list.

Local governments were encouraged to carry out integrated approval procedures, and review enterprises’ registration and filing in one platform.

Capital use of foreign-invested enterprises, foreign talents’ work in China, and their exit and entry will be easier than before, according to the circular.

Efforts should be made to attract foreign investors with advanced technologies and management experience, support their participation in the construction of free trade port in Hainan province, and strengthen the leading role of pilot free trade zones in attracting foreign investment, the circular stated.

It also encouraged foreign-invested enterprises to reinforce R&D, put more capital in advanced technologies, and participate in merger and acquisition in China.

The circular also stressed measures to protect intellectual property right (IPR) and other rights, including lifting the upper limit of IPR infringement compensation, strictly cracking down on illegal activities such as business secrete invasion and trademark squatting, and prohibiting compulsory technology transfer.

For a better layout of foreign investment, it encouraged foreign-invested enterprises in western and northeastern regions to expand financing channels through issuing bonds, and urged cutting logistic costs through a full range of measures.

Also, the government will support the development of key border areas and the establishment of international cooperation zones in western regions which will play a leading and exploratory role in utilizing foreign capital.