New opportunity for foreign investment in China

13 March 2021
Comments 0
Category last news
13 March 2021, Comments 0

At the beginning of 2021, Chinese President Xi Jinping wrote a reply letter to Mr. Howard Schultz, Honorary Chairman of the Board of Directors of the American Starbucks Corporation, stating that “China begins the new march of building a modern socialist state in a comprehensive manner, which will provide a wider field for companies from all over the world. Including Starbucks and other American companies, to develop in China, “which made it clear to the international community once again that China’s determination to expand openness is firm and unwavering.

On the twenty-seventh of January 2021, the implementation of the 2020 version of ((a list of industries that encourage foreign investment)) “list of encouragement, for short,” in China, which attracted the interest of foreign investors and companies with foreign investment, as it means that companies from all countries of the world, including Starbucks will receive a new opportunity to develop in China.

Attracting investments that meet the requirements of high-quality development

As an important part of China’s policy of promoting foreign investment, the “list of encouragement” is one of the main rules that foreign investors and companies with foreign investment rely on to enjoy preferential treatment.

In 2019, the China Development and Reform Commission and the Chinese Ministry of Commerce merged the encouragement materials for ((Indicative List of Foreign Investment Industries)) and ((List of Industries with Excellence for Foreign Investment in the Western and Central China Region)) for the first time, and issued the 2019 edition of The “Encouragement List” and a large number of encouragement materials in it to enhance foreign investment in modern agriculture, the advanced manufacturing sector, modern service industry and other fields, and improve the arrangement of areas for using foreign investments.

Since 2020, the new Coronavirus (Covid-19) epidemic has inflicted heavy losses on the world economy, and led to a decline in foreign investment for the whole world. In order to confront the epidemic, the executive meeting of the State Council of China in March raised the need to adhere to expanding the scope of openness to the outside world and to take many measures to stabilize foreign trade and the flow of foreign funds to China, and one of the measures is to expand the list of industries in which foreign investment has been encouraged to make foreign investment in More areas enjoy preferential policies in taxes and more.

((Recommendations of the Central Committee of the Communist Party of China regarding the formulation of the fourteenth five-year plan for the national economy and social development and long-term goals for the year 2035)) suggested adherence to the implementation of expanding the scope of openness to the outside world on a larger scale and in a wider field and at a deeper level depending on the supremacy of our country in the market. Big to enhance international cooperation and achieve mutual benefit and win-win. ”

Geng Nan, a researcher with the Academy of International Trade and Economic Cooperation of the Chinese Ministry of Commerce, said the issuance of the new version of the “Encouragement List” is an important measure that broadens the scope of foreign investment and helps raise the confidence of foreign investment. By guiding the “cheerleader”, foreign funds can flow into areas that are consistent with China’s need for high-quality development, and foster the formation of a new development pattern in which domestic circulation is the mainstay, and domestic and foreign dual trading reinforces each other. This showed China’s progress towards attracting foreign investment to high-quality development fields and meeting the domestic demand for the establishment of the new system for an open economy at a higher level.

Investment trends are more evident

After the amendments, the total items of the “Encouragement List” increased to 1,235 items, an increase of 127 items compared to its 2019 version. The relevant official at the Chinese Ministry of Commerce said that these amendments embody the demands for improving industries and upgrading their level and the harmonious development between regions, and encouraging foreign funds to flow into The advanced manufacturing sector and modern service industry, encouraging foreign funds to flow into western and central China. Among the newly added areas of investment, there are advanced manufacturing areas such as artificial intelligence and integrated circuits, as well as areas related to people’s livelihood such as modern logistics and informatics.

Mr Geng believes that the COVID-19 epidemic in 2020 has caused major shocks to the industry and supply chain worldwide. Although China first brought the epidemic under control and achieved an economic recovery, the supply chain for the industries concerned was already affected. The added areas exemplify the purpose of enhancing the resilience of the supply chain of important industrial chains. The areas chosen not only reflect “making up for deficiencies”, but also correspond to the latest trends in national and industrial development.

In fact, quite a few companies with foreign investment have arranged their businesses in the central and western regions of China. Until 2020, the number of companies listed on the list of the 500 most powerful companies in the world and which opened branches in Sichuan Province in western China, reached 352 companies, including 247 foreign companies. Lai Minglong, general manager of the China subsidiary of AstraZeneca, a listed among the world’s 500 most powerful companies, said his company has set up its western China headquarters in Sichuan as one of the important strategic bases in the China market.

The official in charge of Chengdu Base (capital of Sichuan Province) to research and develop automatic industrial products for Siemens said that this base is not only an important station in the company’s global industry network, but also a forward center for the industry. With the rapid development of the Siemens plant at the base and the rapid growth of the Chinese market, the company’s investment in Chengdu increases annually.

Zhou Xueqi, an assistant researcher at the Institute of World Economy and Policy under the Chinese Academy of Social Sciences, said that the advantages of western and central China in labor costs, land resources and policies have become prominent after more than forty years

Comments are closed.