China’s foreign-investment push still boils down to transparency and cumbersome restrictions, business groups say
- As authorities lay on the charm to lure companies and investors from abroad, foreign business representatives flag fears that Beijing’s grip is getting tighter
- Tax changes are welcome, but foreign firms want to see fewer hiring restrictions, an acceleration of digital trade, and less-restrictive cross-border data transfers
Foreign investors remain deeply concerned about China’s tightening grip on matters of national security, and they are calling for greater transparency by Beijing to improve the business environment as they await the impact of policy changes and support measures.
“New data privacy and counter-espionage laws have led some international companies to segregate their China operations, inhibiting integration and FDI inflow. A review of these regulations is imperative,” and Beijing needs to better integrate and open up into globalisation, said Noah Fraser, managing director and chief representative at the Canada China Business Council.
“Business, fundamentally, thrives on predictability and stability. We hope Beijing’s policymakers will continue to engage in constructive conversations, integrating the perspectives from a diverse set of residents and investors,” he said during a Monday panel at the China International Fair for Trade in Services in Beijing.
Roberta Lipson, founder of United Family Healthcare and vice-chair of the American Chamber of Commerce in China, said at the same panel that further transparency and continuity would be welcomed – especially greater transparency in regulations concerning portfolio investments, data protection and espionage, which represent some of the biggest worries among foreign companies in China.
The remarks came as the world’s second-largest economy is grappling with dwindling confidence among foreign investors, leading many to consider pulling out of the country, while China’s weak post-Covid economic performance has also raised worries over its growth prospects.
Policy predictability, data security and the anti-espionage law were high on the work agenda for US Commerce Secretary Gina Raimondo during her China visit last week.
Raimondo’s comment that some American firms already believe China is “uninvestable” also raised eyebrows and sparked discourse.