China Rolls Out More Measures to Attract Foreign Investment

The document calls to expand the channels for foreign investors to invest or operate in China and pledges to improve services to make it easier to operate, such as improving visa policies for executives of foreign enterprises and their families, ensuring data security and decreasing investigations into enterprises with low credit risk. 　

The document pledges to strengthen the protection of intellectual properties and give more financial support to those investing in State-encouraged fields. With tax incentives and other government allowances, the document encourages foreign enterprises to reinvest in China with their profits and participate more in the innovation and R&D of advanced technologies. 　

It stresses that foreign enterprises should receive the same treatment as domestic firms. It supports foreign enterprises to equally participate in government purchasing based on laws and to equally engage in designing standards. 　

The document prioritizes the quality of foreign investment, encouraging foreign investors to set up R&D centers in China or cooperate with domestic enterprises in technological development or make breakthroughs in China’s key technological projects. The document also encourages foreign enterprises to launch vocational training in key fields like advanced manufacturing, modern services and the digital economy by partnering with Chinese vocational schools or training centers. 　

The measures come against the backdrop of a sluggish global economy and the tense international environment amid aggravated Sino-US relations. New data from China’s Ministry of Commerce shows that in the first half of 2023, China’s foreign investment in actual use fell by 2.7 percent year-on-year, though the number of new foreign enterprises increased by 35.7 percent. 　

Experts warned that such figures are based on relatively low figures during the pandemic and that China needs to keep attracting foreign investment, which will play an important role in China’s economic recovery and industrial upgrading. 　

According to a 2022 report by the Xinhua News Agency, foreign enterprises, though accounting for less than 3 percent of the total number of enterprises in China, have created around two-fifths of China’s foreign trade, contributed to one-sixth of total tax revenue and provided one-tenth of urban employment. The report described foreign enterprises as “an important force” for China’s economic growth. 　

China, as the central government often stresses, has been working hard to be more open to foreign investment and enterprises, with the negative list for foreign investment getting increasingly short. Although the federal government of the US often preached “decoupling” or “de-risking” from China, many foreign enterprises still prioritize the China market and intend to continue investing. 　

Over the past several months, senior Chinese officials have received and talked with an array of senior leaders from multinationals, including Apple, Tesla, Qualcomm and Intel from the US, Airbus and bank BNP Parisbas from France and chipmaker ASML of the Netherlands. 　

Chinese government departments are encouraged to increase and deepen communications with foreign enterprises and send delegations abroad to woo foreign investors. 　

The document also proposes to set up a “round-table conference” system that would keep existing foreign enterprises and dispel concerns from those that are reluctant to invest in China.