China Unveils 24 Fresh Initiatives to Draw in Foreign Investment

China’s legislature has released a plan to attract foreign investment, aiming to improve the business environment and expand market access for foreign companies. The plan includes measures to ease administrative burdens and level the playing field for foreign companies, with a focus on key industries like manufacturing and telecommunications. Pilot projects in FTZs will relax restrictions on foreign investment in technological innovation.

China’s legislature has released a new plan to attract foreign investment after a year of falling foreign direct investment inflows. The plan, the latest in a series of efforts to boost foreign capital in China, proposes measures to improve the business environment, ease administrative burdens, expand market access in key industries, and even the playing field for foreign companies. We outline the policy proposals that could benefit foreign companies in the coming years.

The State Council has released a 24-point plan to boost foreign capital in China. The plan, titled the Action Plan to Solidly Promote High-Level Opening Up and Make Greater Efforts to Attract and Utilize Foreign Investment (the “Action Plan”), outlines various measures to attract foreign investment, including expanding market access in key industries, ensuring equal participation of foreign companies in government bidding, and facilitating cross-border data flows.

China has been striving to encourage and support foreign investment in recent years. Efforts ramped up in 2023 when levels of foreign direct investment (FDI) inflows to China fell by 8 percent year-on-year. In July 2023, the State Council issued a similar set of measures that aimed to improve the business environment for foreign companies, with suggestions including measures to strengthen intellectual property rights and ease regulations on cross-border data flows.

In this article, we outline some of the key measures proposed by the State Council to attract foreign investment in 2024.

One of the main measures in the Action Plan is to expand market access for foreign companies by “reasonably reducing” the negative list for foreign investment access. This document lists the industries and sectors that foreign investors are prohibited from participating in, and thus by shortening it, more sectors will become accessible to foreign investors. It was last updated at the end of 2021.

The Action Plan reiterates the directives mentioned in the GWR, stating that the government remove restrictions on foreign investment in the manufacturing sector, and continue to promote the opening up of telecommunications, medical, and other fields.

Meanwhile, the Action Plan also calls for carrying out pilot projects to relax foreign investment access in the field of scientific and technological innovation. This will be carried out in pilot free trade zones (FTZ) such as Beijing, Shanghai, and Guangdong, which will be permitted to select a number of qualified foreign-invested enterprises (FIEs) to expand access in areas such as the development and application of genetic diagnosis and treatment technologies.

This article is republished from China Briefing. Read the rest of the original article.

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