BEIJING, Aug. 25, 2023 /PRNewswire/ — A news report from on China’s measures for attracting foreign investment:

At present, China, which boasts the strength of an enormous market, is opening its gate wider, sending out clear signals to attract more foreign investment. This time, China is adopting measures in an unprecedentedly steadfast posture.

China’s State Council has recently issued a statement outlining its guidelines regarding ramping up efforts to attract foreign investments. In the statement, 24 specific measures in six aspects have been put forward, including improving the quality of foreign capital utilization, guaranteeing the national treatment of foreign-invested enterprises, strengthening the protection of foreign investment, and increasing fiscal and tax support. It is “unprecedentedly steadfast” because most measures listed in the document are groundbreaking compared to those in the past.

I’ll give you some examples. In the past, equity investment from foreign investors was not allowed in China. But this time, the statement points out that qualified foreign investors are encouraged to set up investment companies and regional headquarters. Enterprises invested and established by relevant investment companies can enjoy favorable treatment in accordance with relevant regulations. These investment companies could provide commercial services, consultancy services and some financial services for the relevant enterprises, which will pave the way for foreign investors in distributing their investment by allocating elements like the capital on a larger scale.

Here’s another example. The R&D as well as the international operations of enterprises would involve cross-border data flows. The document stresses the exploration of a convenient and secure management mechanism for cross-border data flows, including establishing a green channel for qualified foreign-invested enterprises to efficiently carry out security assessments for the export of important data and personal information, and facilitate the safe, orderly, and free flow of data.

It’s not hard to see that all these measures aim to solve the core concerns and worries of foreign investors, which is especially meaningful for facilitating foreign investments.

Since the beginning of this year, two of the meetings convened by the Political Bureau of the Central Committee of the CPC have highlighted intensifying efforts to attract and utilize foreign investment. China made these efforts based on the changes in the economic landscape both in China and abroad. In 2022, global Foreign Direct Investment (FDI) has seen a drastic decrease of 12%, and the year 2023 continues to suffer from downward pressure. According to an institution, the percentage of global FDI decline in the first quarter of 2023 is still a two-digit number, and affected by that, China’s actual use of FDI in the first half of the year fell by 2.7%. That China released the 24-point guidelines to optimize the foreign investment environment, could on one hand bring more investment opportunities for cross-border funds against the backdrop of sluggish global economic growth. On the other hand, it represents a vision for foreign investment to play an important role in enlarging China’s domestic demand and increasing future supplies.

It has been a while since the international community paid great attention to the recovery and development of China’s economy. Frankly put, China’s overall economy indeed is currently faced with some challenges. In fact, influenced by factors including the COVID-19 pandemic and regional conflicts, global economic environment is in a phase of complexity and grimness, and challenges are shared by all countries. One sure thing is that, under the context of economic globalization, acts of “decoupling”, fragmenting industrial and supply chains, and technology blockades are not the solution to problems, while confronting difficulties, treating them with the right remedies, and conducting more efficient international cooperation are the right ways out.

The issuance of policies related to spurring foreign investment in China embodies the determination of the Chinese government to open up further to the world. With more policies and measures of this kind put into action, companies from around the world are bound to enjoy the dividends of development and thrive together with China’s economy.

(By Zhang Yongjun, Deputy Chief Economist of China Center for International Economic Exchanges)

China Mosaic

The 24-point guidelines for attracting foreign investment: Chinas new recipe for boosting economy