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China to further utilize foreign investment

Updated: Nov 07,2019 05:04 PM    english.www.gov.cn

The State Council released the opinions on further improving the utilization of foreign investment on Nov 7, with the aim of promoting high-quality development and unlocking market vitality.

The document puts forward 20 opinions in four aspects to safeguard a more “fair, transparent and predictable” business environment for foreign-invested enterprises.

EXPANDING OPENING-UP

To open up more sectors to foreign investors, China will continue to reduce the negative list for foreign investment across the nation and regions beyond pilot free trade zones, and eliminate restrictions that are not on the negative list.

China will move faster to further open up the financial industry, eliminate all restrictions on the scope of business for foreign banks, securities companies and fund management companies, and remove requirements on total assets for the establishment of foreign-funded banks.

Quantitative entry conditions will be reduced for foreign investors in banking and insurance industries. The requirements for total assets and operation time will be removed for foreign insurance brokerage companies, enabling business expansion in China.

Policies on foreign investment in the automotive industry will be fine-tuned to ensure equal market access for domestic and foreign automobile enterprises in manufacturing new energy vehicles. The measures for the “Parallel Credit Administration” will be revised to allow the transfer of credits between complete vehicle manufacturers invested by multinational companies in China.

To build a fair business environment, more efforts will be taken to eliminate institutional obstacles. The business scope for domestic and foreign enterprises should be unified, and the regulations for foreign investors in offering internet and entertainment services should be perfected.

FURTHER PROMOTING INVESTMENT

To encourage and lead more foreign investment in high and new technology industries, China will optimize guidance and services for related enterprises.

China will improve the construction of pilot free trade zones and bring them to the fore of opening-up. More provincial-level economic administration approval rights, particularly investment approval and market access, will be released to free trade zones should conditions permit.

The quality of investment attracted by open platforms will be increased. Local governments will be encouraged to support national-level economic and technological development zones with abilities to build competitive industrial clusters. Branded business and investment promotion platforms will be created. Key enterprise contact systems will be built to offer professional and one-stop services to leading and core enterprises in the industry chain. A batch of new comprehensive bonded zones will be built in eligible areas in Central and Western China as needed.

Local efforts to attract foreign investment will be enforced. China will support local governments in making assessment and incentive policies, especially more flexible incentive measures for investment promotion departments and non-civil servant workers.

Also, outbound investment publicity and inspection tours will be considered and supported within a reasonable expenditure limit.

According to opinions, investment service platforms should be developed across the country to actively inform foreign enterprises of related policies. Policy advocators should visit foreign enterprises to offer policy training, address their concerns and help them effectively utilize related supporting policies.

DEEPENING REFORM TO FACILITATE INVESTMENT

China will lower the cost of cross-border capital use. Foreign-funded enterprises will be supported to expand the cross-border use of renminbi. The payment convenience for capital account income will be also increased. Opinions pledged support to foreign-invested companies in independently choosing their model of borrowing from foreign lenders, saying foreign businesses will be encouraged to use their capital for equity investment in China.

It will be easier for foreigners to work in China. For foreign innovative talents, entrepreneurs and professionals in short supply, China will extend the limitations on age, education background and work experience.

China will optimize the approval process for the use of land for foreign-funded projects. Preliminary site selection and land use reviews for foreign-invested projects will be consolidated, and the requirements for permission to plan projects and use land for construction will be combined.

PROTECTING LEGITIMATE INTERESTS OF FOREIGN INVESTORS

China will fully implement the foreign investment law, and establish and improve institutions for accepting complaints.

The country will also strengthen the standardization of the implementation of regulatory policies and make the formulation of regulatory documents more transparent. Forced transfer of technology will be strictly banned.

China will fully uphold the role of judicial protection of intellectual property rights (IPR), improve the IPR protection mechanism and establish a comprehensive and diversified resolution mechanism for intellectual property disputes.

All local governments and departments shall not discriminate against foreign-funded enterprises in aspects like the release of government procurement information, and shall not restrict the ownership form, organizational form, equity structure or investor country, as well as product or service brands of suppliers.

According to the release, foreign capital has played a unique and important role in China’s economic growth, and the country must always attach great importance to the use of foreign capital to promote high-quality development and modernization.

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