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China to attract foreign investment with better business climate

Zhang Yue
Updated: Oct 16,2019 11:58 PM

China will introduce more measures and foster a more enabling business environment to facilitate foreign investment. The decision was made on Oct 16 at the State Council’s executive meeting chaired by Premier Li Keqiang.

The Chinese government places great importance in attracting foreign investment. General Secretary Xi Jinping has said on multiple international occasions the imperative to further open up the Chinese market, improve the business environment and extend equal treatment to all foreign investment, to break new ground in opening-up. Premier Li Keqiang has repeatedly urged intensifying efforts to attract foreign investment, fostering a more enabling business environment, and addressing the legitimate concerns of foreign investors.

The meeting decided to open up more areas. Restrictive measures outside the national and FTZ negative lists concerning foreign investors’ market access will be downsized.

Restrictions on the business scopes of foreign-invested banks, securities companies and fund management firms already established in China will be fully lifted.

The newly revised administrative regulations on foreign-invested banks and insurance companies will be fully implemented. Policies on foreign investment in the auto industry will be refined, including equal treatment in market access for both domestic and foreign-invested new energy vehicles made in China.

“We must improve our policies and implement them well,” Premier Li said. “Promises made must be kept. No failure in keeping our word is allowed.”

It was decided at the meeting to further facilitate investment. The pilot reform to facilitate the payments of revenue under capital accounts will be introduced in more places. Foreign-invested companies will be supported in independently choosing their model of borrowing from foreign lenders, and will be encouraged to use their capital funds for equity investment in China. For foreign-invested projects, the preliminary reviews of site selection and land use will be consolidated, and the permitting requirements for planning and use of construction land will be combined.

The meeting urged equal protection of the lawful rights and interests of foreign investors. No forced transfer of technology will be allowed, including not in disguised forms. Trade secrets will be protected in accordance with the law. The notification-removal rule concerning patent infringement at e-commerce platforms will be improved. In government procurement, there should be no restrictions based on the ownership type of suppliers, nationality of investors, or the brands of products and services. Local governments will be supported in intensifying efforts to attract foreign investment. Central and western parts of China will be prioritized in setting up new comprehensive bonded zones.

Figures released in September by China’s Ministry of Commerce show that in the first eight months of this year, another 27,704 foreign-invested businesses were established in China. Utilized foreign capital exceeded 600 billion yuan, up by 6.9 percent year-on-year.