China changes gear: strategy to attract direct foreign investment shifts from quantity to quality

Beijing aims to make a big leap forward from quantity to quality foreign direct investment (FDI), pledging to ease access for overseas investors to a clutch of service sectors, including architecture, auditing and finance.

According to the draft 13th five-year plan (2016-2020) unveiled on Saturday, the central government said it would try to use foreign funds to help move the economy and its products up the value chain.

The new policy direction could be a watershed for the world’s second-largest economy, which is under pressure to cut excess capacity and shift to a consumption-driven growth model.

The five-year plan, a guideline for the nation’s social and economic development, which sets the tone for major policymaking in all industries and regions, was submitted to the National People’s Congress on Saturday and will be rolled out once it has the top legislature’s endorsement.

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The FDI policy in the five-year plan reflects the mainland’s continued positive view of foreign expertise and investment, but indicates the country will no longer rely on foreign investors for the manufacture of products such as cars.

Child education, elderly care, insurance, securities and banking will be among the sectors aiming to attract involvement from overseas players, according to the draft plan.