Multinationals encouraged by policy support, eye expansion in Chinese market
Chinese officials on Monday vowed to thoroughly implement newly issued measures to boost foreign investment in China, and expand market access for foreign investors in several key areas, including relaxing restrictions on foreign investment in listed companies.
The remarks and concrete measures further underscore China’s unwavering commitment to high-level opening-up and attracting more foreign businesses to develop in the vast Chinese market, even as the US and some of its allies move to ban normal investments into China under the guise of national security, Chinese experts noted.
Recently issued guidelines on further optimizing the business environment for foreign investment contain a new batch of targeted and highly valuable measures to stabilize foreign investment, Assistant Minister of Commerce Chen Chunjiang told a press conference on Monday. The measures will “more effectively boost the confidence of foreign investors and help attract more high-quality foreign investment,” he said.
On Sunday, the State Council, China’s cabinet, issued a 24-point guideline to optimize the business environment for foreign investors. The guideline covered six areas, including ensuring national treatment for foreign investment and enhancing protection of foreign investments. The sweeping guideline involves 29 central government departments and all localities, according to officials on Monday.
The latest efforts have been well-received by foreign businesses operating in China, with many planning to expand their presence in the Chinese market, while others have already moved to do so.
Jiang Hao, a Shanghai-based partner at Roland Berger, a global consultancy, said that the guideline was widely shared among foreign businesses, and many felt China’s very encouraging attitude toward foreign businesses. “This is very important,” he said.
Jiang told the Global Times that while such an attitude is very positive and the policy measures are timely, the key is to put the measures into practice to address concerns among foreign businesses, including the overall tone of policy as well as specific issues such as tax deductions for foreign professionals.
The State Council guideline calls for greater fiscal and tax support for foreign businesses. It also calls for greater support for foreign businesses to set up research and development (R&D) centers in China and encourage them to participate in major technology projects.
French multinational company Schneider Electric last month completed a third-phase project at its Shanghai plant, an all-new, digital and automated “zero carbon” factory, which represents another move in the company’s commitment to deepen its roots in the Chinese market and continuously expand investment in China through its “China Hub” strategy, Yin Zheng, executive vice president of China & East Asia operations at Schneider Electric, told the Global Times on Monday.
In January, Schneider Electric launched an innovation lab in Shanghai, which will focus on R&D in power supply and energy storage. China has become one of Schneider Electric’s four R&D bases around the world, according to the company.
An increasing number of multinationals are expanding their R&D and advanced manufacturing capabilities in the Chinese market. For example, US chip conglomerate Intel recently built a new innovation center in Shenzhen, which will focus on artificial intelligence, chip application development, edge computing, digital development and other cutting-edge fields.
“Foreign enterprises have sufficient confidence in investing in China,” Yao Jun, an official from the Ministry of Industry and Information Technology (MIIT), said at the press conference on Monday, pointing to a 28.8 percent increase in actualized foreign investment in China’s high-tech manufacturing sector.
Yao said that the MIIT will further improve the service guarantee mechanism for key foreign-funded projects in the manufacturing industry and actively coordinate and solve difficulties in the implementation and operation of key foreign-funded enterprises and projects.
“We are very optimistic about the huge potential of the Chinese market and China’s manufacturing industry. China is one of the most important growth markets for Trane Technologies in the world,” Xu Yong, vice president of Trane Technologies Asia Pacific, told the Global Times on Monday, noting that the company has a global R&D center and four production bases in China.
As China emphasizes innovation-driven development, it will continue high-level opening-up, and the key areas for increasing foreign investment are mainly in high-tech areas, including in information technology, chips and new materials, said Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation in Beijing, adding that the growing Chinese market offers greater opportunities for foreign businesses.
“This is a win-win,” Bai told the Global Times on Monday.
China’s efforts come as cross-border investment around the world is falling amid the global economic downturn and increasing US restrictions and bans on normal investment, as well as toxic domestic economic policies that profoundly changed capital flows.
Actualized foreign investment in China fell 2.9 percent in the first half of 2023, but officials and experts stress that policy support and the vast potential of the Chinese market will ensure stable growth in foreign investment.
Chen said that amid a complex and severe situation in foreign direct investment, China will, in addition to the newly announced measures, study the further shortening of the negative list of sectors off-limits for foreign investments, continuously expand market access for foreign capital and change relevant regulations to relax restrictions on foreign investors’ strategic investment in listed Chinese companies.
Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, said that such targeted measures will help tackle major challenges faced by foreign businesses.
“There are specific measures designed for major sectors and regions, which puts at ease the minds of foreign businesses,” Wang told the Global Times on Monday.
(Global Times)
