context: Against sluggish numbers in 2023, boosting foreign investment is a top priority for the PRC. To this end, the State Council issued 24 measures in August 2023 and another action plan in March 2024. Beijing still sees foreign investment as an important source of know-how for its advanced industries, but it also recognises that many of the pressing problems facing foreign firms now are structural (i.e. business environment rules or local government misconduct). Solving these issues would require comprehensive reforms that go beyond foreign investment.
Commenting on the State Council's new action plan on foreign investment, three trade experts shared their insights on future priorities in this area in an article on 21jingji.
On manufacturing Wang Xiaohong 王晓红 China Centre for International Economic Exchanges (CCIEE) Information Department deputy director notes
- removing restrictions on foreign access in the manufacturing industry reflects the PRC's commitment in opening up to foreign investment and sharing the dividends of its massive market with the world, as well as integrating into the global industry chains
- given the changing industrial landscape in the PRC, the future focus for attracting foreign investment would be on advanced manufacturing
- expanding the scope of industries welcoming foreign investment in the PRC can introduce
- foreign advanced technology, high-end talent and advanced management methods
- expanding the scope of industries welcoming foreign investment in the PRC can introduce
After a round of penalties on foreign and private enterprises for violating regulations in the past two years, Tian Xuan 田轩 Tsinghua People's Bank of China School of Finance vice dean asserts that now is the time for the PRC to showcase support towards compliant businesses and demonstrate its friendliness to foreign enterprises. This can be done via adopting targeted policies such as encouraging them to list on domestic and overseas capital markets.
Zhang Yansheng 张燕生 China International Economic Exchange Centre chief researcher notes that visas and mobility is an area that is the most pressing and also the easiest to make improvements. He says that the priority now is to facilitate business visas and online payment. This can reduce the unnecessary worries of foreign investors in the PRC. The more open the PRC's market economy, the easier it is to foster international cooperation, he adds.