China releases action plan to attract foreign investment

CHINA’S State Council released an action plan to further open up the Chinese market to foreign firms after overseas investment fell to record lows last year.

The State Council called on local authorities and government departments to come up with timetables and roadmaps to allow foreign investment in more sectors, and loosen visa rules, to make doing business easier in the world’s second-largest economy.

The Chinese government has released a number of measures over the past year including a 24-point action plan to boost foreign investment in August. However, global CEOs have complained of promise fatigue and say the risk-reward trade off for investing in China has changed dramatically as concerns grow over the country’s long-term growth prospects.

Other points in the action plan:

• Allow Beijing, Shanghai, Guangdong and other pilot free trade zones to select a number of foreign firms to expand into areas such as genetic diagnosis and treatment technologies

• Support qualified foreign-funded financial institutions to participate in domestic bond underwriting; encourage foreign investment in private equity funds

• Implement preferential tax policies for foreign investors investing in China’s bond and other financial markets

• Build the “Invest in China” brand

• Support the flow of data between foreign-invested enterprises and their headquarters; improve the rules for cross-border flow of data.

• Formulate standards for cross-border data transfer in the Guangdong-Hong Kong-Macao Greater Bay Area and explore a whitelist system for cross-border data flow in the area

• Relax the validity period of visas for entry into China to two years for managers and technical personnel of foreign enterprises and their accompanying spouses and children

• Promote the resumption of international flights at key aviation hubs such as Beijing, Shanghai and Guangzhou

• Negotiate and sign free trade agreements with more countries and regions

BLOOMBERG