China pledges ‘better business environment’ for foreign firms in latest bid to woo investment

Vice-Premier Hu Chunhua says China will improve the business environment for foreign firms, including making personnel entry easier
The world’s No 2 economy will also relax market access for foreign investors and ensure land and power supply for them, Hu says

China trade

Ji Siqi

Published: 10:15pm, 3 Dec 2021

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China has pledged to address overseas companies’ concerns by fast tracking entry of staff into the country and stabilising supply chains in Beijing’s latest effort to lure foreign capital.

At a meeting on Thursday with business executives of more than 20 foreign companies, including from the United States, European Union, Britain and Japan, Vice-Premier Hu Chunhua said China will improve services for multinational firms to solve their difficulties and support investment in the country.

“We must take the initiative to benchmark high-standard international economic and trade rules, create a better business environment, and do a good job in piloting the innovation of the business environment,” Hu said.

His comments come amid frustration from companies about Beijing’s tight border control and strict quarantine measures, which have left foreign experts stranded outside China; as well as the government’s focus on boosting home-grown technology at the expense of foreign companies; and the recent crackdown on technology, education and property sector.

It is necessary to take practical measures to further optimise the ‘fast track’ for personnel entry while ensuring pandemic prevention

Hu Chunhua

Hu said the operation of foreign businesses in China remained stable overall and the government is confident of more resilient economic growth.

“It is necessary to take practical measures to further optimise the ‘fast track’ for personnel entry while ensuring pandemic prevention, promote smooth international logistics and help foreign enterprises stabilise their supply chain while providing them with various pandemic preventive services,” Hu said.

China will also relax market access for foreign investors and ensure land and power supply for them, the vice-premier said.

China has been slowly cutting back its “negative list”, which contains sectors and industries restricted or prohibited from foreign investment. The 2020 list was trimmed to 123, down from 131 sectors a year earlier, and the government has reiterated it will further reduce the number.

China will relax market access for foreign investors, Vice-Premier Hu Chunhua says. Photo: EPA-EFE

In the future, China will implement a policy of “entry unless on the list”, Hu said.

In the first 10 months of this year, foreign direct investment (FDI) grew by 23.4 per cent from a year earlier to US$142.01 billion – a lower gain than the 25.2 per cent rise seen in the January-September period.

In October, the Ministry of Commerce released the 14th five-year foreign investment plan, which forecast FDI into China to grow to US$700 billion between 2021-25.

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The new figure is a 0.2 per cent rise from the US$698.9 billion worth of FDI recorded in the previous five years.

It also reflects a more conservative growth target compared with the 13th five-year plan period, which set the goal of a 6.6 per cent increase for 2016-20, data from the commerce ministry showed

The 14th five-year foreign investment plan also acknowledges that bilateral relations and economic conditions pose unprecedented challenges to foreign investment.