China promises more market access for foreign players
Commitments come after overseas companies say it is much harder to do business on the mainland
Beijing unveiled a long list of policy guidelines on Tuesday, promising wider market access for foreign investors.
The guidelines were released by the State Council just a few hours before President Xi Jinping used an address at the World Economic Forum in Davos to underscore China’s commitment to free trade.
According to the guidelines, Beijing will “create an easier and more open and transparent business environment ... to stabilise the scale and speed of foreign investment”.
The State Council said China would lower market barriers for overseas financial firms and make it easier for foreign investors to invest in the manufacturing and energy sectors. It also urged local authorities to give equal treatment to foreign businesses in areas like licensing and government procurement.
Overseas businesses would also be encourage to launch initial public offerings and sell bonds in China. In addition, foreign firms would get a 30 per cent discount on land use costs.
It’s in China’s own interest to level the playing field for foreign companies
Most of the policies repeat or expand on existing measures but the State Council said all government departments and authorities must “act proactively” to implement them.
The mainland attracted 813.2 billion yuan (HK$914 billion) in foreign direct investment last year, up 4.1 per cent from the previous year.
The pace slowed from a 6.4 per cent rise in 2015, according to commerce ministry data.
The commitments come as foreign firms say opaque rules and protection for domestic rivals are making it tougher to operate on the mainland.
McDonald’s said earlier this month it was selling a controlling stake in its mainland operations to a Chinese state-backed company, and Seagate, the world’s largest hard disk producer, said a few days ago that it would shut down its Suzhou plant.
Bocom International chief strategist Hong Hao said the guidelines lacked detail and would not have an immediate impact. They also depended on the restoration of confidence among foreign investors for success.
“Market confidence in China suffered a huge blow over the years when the government intervened too much, such as with the delay to opening stock index futures,” Hong said
