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China to introduce more measures to facilitate foreign investment

Zhang Yue
Updated: Sep 26,2018 10:28 PM

The Chinese government will roll out more measures to facilitate the delivery of major foreign-invested projects, lower tariffs on some imported goods and streamline customs clearance procedures at a faster pace, in an effort to expand opening-up and foster a fairer, more convenient and more enabling environment for foreign investment, it was decided at the State Council executive meeting presided over by Premier Li Keqiang on Sept 26.

The Chinese government places great importance on foreign investment facilitation. President Xi Jinping has underscored China’s firm commitment to pursuing the fundamental national policy of opening-up, promoting high-standard investment, protecting lawful rights and interests of foreign investors, and fostering a more attractive investment environment. Meanwhile, Premier Li Keqiang has emphasized on many occasions the pledge to widen market access, give equal treatment to Chinese and foreign companies, more effectively protect intellectual property rights, and better facilitate foreign investments in China.

It was decided at the meeting on Sept 26 that an online filing process will be introduced in regulating foreign investment in China. Unified market access criteria will be applied to both Chinese and foreign investment in areas outside of the negative list. Large-scale foreign investments eligible for major project development plans will receive support on land and sea-use approval procedures, and accelerated environmental impact assessment and their logistic costs will be reduced.

More areas will be open to foreign investment. The withholding tax deferral policy for reinvestment by foreign investors in China will be expanded from the designated encouraged projects to any areas and projects that are not prohibited. The meeting also called for intensified protection of intellectual property rights.

“This year marks the 40th anniversary of reform and opening-up in China. Given the evolving situation at home and abroad, it is important to firmly commit to fostering a greater opening-up and attracting foreign investment to help anchor market expectations,” Premier Li said.

Statistics from the Ministry of Commerce show that paid-in foreign investment reached $86.5 billion between January and August 2018, a 6.1 percent increase year-on-year.

More steps were approved at the meeting to cater to diverse consumer needs and facilitate industrial upgrading. Starting from Nov 1 this year, import tariffs on a total of 1,585 tax items will be slashed. The average tariff rate for high-demand products in domestic markets such as machinery and industrial instruments will be cut, from 12.2 percent to 8.8 percent, textile and construction materials from 11.5 percent to 8.4 percent, paper and other resource-based products and primarily processed goods from 6.6 percent to 5.4 percent. Tax brackets will be consolidated for goods in the same or similar categories.

Tariff cuts introduced to date will help reduce corporate and consumer tax burdens by nearly 60 billion yuan and lower China’s overall tariff rate from 9.8 percent last year to 7.5 percent.

More efforts will be made to expedite customs clearance. The meeting decided that by Nov 1 this year, the number of customs clearance documents subject to verification at ports will be reduced from 86 to 48. The list of administrative charges at ports will be released before the end of October. Compliance costs for containers clearing will be reduced by at least $100 by the end of this year.

Overhaul of fees must be completed without delay in order to abolish unreasonable charges and cut compliance costs, Premier Li urged at the meeting.

“Competent departments must make concerted efforts to enhance oversight and treat foreign and domestic businesses as equals,” he said.