China Business Daily (Reporter Wang Tongxu) This year's "Government Work Report" pointed out that it is necessary to take the initiative to connect with high-standard international economic and trade rules, steadily expand institutional opening-up, consolidate the basic market of foreign trade and foreign investment, and cultivate new advantages in international economic cooperation and competition.
A few days ago, the General Office of the State Council issued the "Action Plan for Solidly Promoting High-level Opening-up and Attracting and Utilizing Foreign Investment with Greater Efforts" (hereinafter referred to as the Action Plan), which takes pragmatic measures to expand market access, smooth the flow of innovative factors, and connect with international high-standard economic and trade rules, aiming to attract foreign investment more vigorously.
"In recent years, the Chinese government has continued to increase its efforts to open up to the outside world, and has launched a series of policies and measures to stabilize foreign investment and optimize the environment for foreign investment. The promulgation of the action plan once again shows that we attach great importance to attracting foreign investment, strengthen the benign interaction with the world economy with high-level opening-up, and enhance the confidence of foreign investors to invest in China with practical actions. Wu Hao, Secretary-General of the National Development and Reform Commission, said this at the regular briefing on the State Council's policies held on March 20.
In recent years, Hai'an City, Jiangsu Province, has actively promoted the high-quality development of foreign-funded enterprises, played a good role in the combination of "foreign trade, foreign investment, and foreign economic cooperation", provided warm-hearted services in terms of policies and measures, business environment, etc., effectively solved problems for enterprises, and boosted the confidence of foreign investment. The picture shows that in the workshop of Jiabaiyu (Nantong) Electronics Co., Ltd., located in the Taiwanese Industrial Park of Hai'an High-tech Zone, workers are rushing to produce lithium battery products for domestic and foreign markets. (PHOTO COURTESY OF CNSPHOTO)
Raise the level of foreign investment liberalization
Anchoring the solid promotion of high-level opening up and greater efforts to attract and utilize foreign investment, the action plan proposes 24 measures in five aspects.
Pan Jun, senior consulting director of global commodity strategy and visiting professor of Donghua University, told China Business Daily that the implementation of the action plan will help attract more foreign investment into the Chinese market and promote the sustainable and healthy development of China's economy. At the same time, it will also help enhance China's status and influence in the global economy and enhance China's international competitiveness.
In terms of market access, the action plan clarifies five key contents, including: reasonably reducing the negative list for foreign investment access, carrying out pilot projects to relax foreign investment access in the field of scientific and technological innovation, expanding access to foreign financial institutions in the field of banking and insurance, expanding the business scope of foreign financial institutions to participate in the domestic bond market, and in-depth implementation of the pilot project for domestic investment by qualified foreign limited partners.
Experts said that the action plan attaches importance to expanding market access, proposes to improve the level of foreign investment liberalization, reasonably reduce the negative list for foreign investment access, highlights the support for the data flow of foreign-invested enterprises and headquarters, and proposes to accelerate the pilot project of docking international high-standard economic and trade rules.
"By expanding market access, China will provide more foreign investors with a broader market space and attract more foreign capital inflows. This move will further promote market competition, promote domestic enterprises to accelerate transformation and upgrading, and improve industrial level and competitiveness. Financial commentator Zhang Xuefeng told reporters.
Pan Jun believes that in the process of attracting foreign investment, it is necessary to pay attention to improving the quality and efficiency of foreign investment, and avoid blindly pursuing quantity and ignoring quality issues. At the same time, it is also necessary to strengthen the supervision and management of foreign investment, ensure that foreign investment operates legally and compliantly, and safeguard national security and interests.
Expand the catalogue of industries that encourage foreign investment
The action plan clearly states that it is necessary to expand the catalogue of industries that encourage foreign investment and the list of foreign-funded projects.
According to reports, the current 2022 edition of the Catalogue of Encouraged Industries for Foreign Investment has a total of 1,474 entries, including 519 items in the "National Catalogue of Encouraged Industries for Foreign Investment" and 955 items in the "Catalogue of Advantageous Industries for Foreign Investment in the Central and Western Regions".
At present, eligible foreign investment in the encouraged category can enjoy three preferential policies in accordance with the law: for encouraged foreign investment projects, the import of equipment for self-use within the total investment amount will be exempted from tariff except for the Catalogue of Major Technical Equipment and Products Not Eligible for Tax Exemption and the Catalogue of Imported Commodities Not Exempt from Tax Exemption for Foreign-invested Projects, and for foreign-invested enterprises in encouraged industries in the western region and Hainan Province that meet the requirements, the rate will be reduced by 15% Enterprise income tax is levied, and for the preferential supply of land for encouraged foreign-invested industrial projects with intensive land use, the reserve price for land transfer can be determined at a rate not lower than 70% of the national minimum price standard for industrial land transfer corresponding to the local land and other categories.
"In accordance with the deployment of this year's "Government Work Report", we will work with relevant departments to start the revision of the catalogue of industries that encourage foreign investment. The revision of the national catalogue will continue to focus on the manufacturing industry as the key direction to encourage foreign investment, and at the same time promote the integrated development of the service industry and the manufacturing industry, and increase support for advanced manufacturing, modern service industry, high and new technology, energy conservation and environmental protection. The revision of the catalogue of the central and western regions will fully tap the resource endowments and industrial conditions of various localities, and increase support for basic manufacturing, applicable technologies, people's livelihood consumption and other fields according to local conditions. Hua Zhong, head of the Department of Utilization of Foreign Capital and Overseas Investment of the National Development and Reform Commission, said.
Solidly promote high-level opening up
Judging from the numbers alone, in 2023, although the scale of foreign investment attracted by the mainland will fluctuate to a certain extent, the actual utilization of foreign capital will still be at a historical high.
In terms of volume, China's actual utilization of foreign investment in 2023 will exceed 1.1 trillion yuan, the third highest in history. In 2023, high-tech industries accounted for 37.4 percent, an increase of 1.3 percentage points over 2022, and manufacturing accounted for 27.9 percent, an increase of 1.6 percentage points.
In January this year, the United Nations Conference on Trade and Development (UNCTAD) released the Global Investment Trends Watch, which showed that global cross-border investment fell by 18% in 2023 after deducting the factors of transit points for multinational enterprises' investments. In such an environment, the scale of China's attraction of foreign investment has maintained a good trend.
According to Wu Hao, judging from the future trend, China has significant advantages in attracting foreign investment and has broad space. Last year, the number of newly established foreign-funded enterprises in China increased by 39.7%, which fully reflects the enthusiasm of foreign investors to share the opportunities in the Chinese market and their confidence in the future investment prospects.
"For multinational companies, walking with China is walking with opportunities, and investing in China is investing in the future. In the next step, the National Development and Reform Commission will work with all regions and departments to solidly promote high-level opening up in accordance with the decisions and arrangements of the CPC Central Committee and the State Council. Wu Hao said that to further promote high-level opening up, there are four key tasks: first, steadily expand rules, regulations, management, Second, we will reasonably reduce the negative list for foreign investment access, implement the comprehensive abolition of foreign investment access restrictions in the manufacturing sector, and further relax the restrictions on foreign investment access; Third, we will continue to optimize the business environment, promote the implementation of equal treatment of enterprises under all types of ownership, improve the direct contact mechanism for foreign-funded enterprises, and promote the solution of the problem of foreign investment projects in the investment landing, Fourth, we will strengthen the services for foreign-funded projects, continue to launch a new batch of major foreign-funded projects, strengthen the guarantee of project elements, and promote the expansion of foreign capital inflow through landmark major foreign-funded projects.
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