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Administrative reform plays key role in attracting foreign investments

Updated: Dec 31,2016 2:53 PM

The State Council at its Dec 28 executive meeting chaired by Premier Li Keqiang approved a new guideline to further attract foreign investment and advance China’s opening up, along with a slew of measures to build a level playing field.

This sends a signal to foreign investors that China welcomes more foreign capital and is willing to create a fair investment environment through further deepening administrative reforms.

Foreign capital inflows in China are slowing down in 2016 due to increasing domestic labor costs and strengthened foreign investment policies by other countries.

Despite the challenges, China still needs to stick to the opening-up policy since its development relies on the benefits brought by the injection of foreign capital, such as advanced technologies and innovative management concepts.

Premier Li stressed many times in 2016 on different occasions that China is still a hotspot for foreign investments. For example, during a November inspection tour to General Electric (GE) in the Shanghai FTZ, he said that GE’s choice of opening headquarters in China, means China is still the best place to make an investment.

Besides the vast market prospect supported by the 1.3 billion population, the core to attract foreign investments still lies in carrying out administrative reforms, including streamlining administration, delegating powers and optimizing services, with an aim to reduce institutional costs. The reform will promote a better market environment and bring more benefits to foreign investors.