Mar­ket will open wider to in­vestors

Lib­er­al­iz­ing rules for for­eign eq­uity in key sec­tors a pri­or­ity, reg­u­la­tor says

China Daily (Hong Kong) - - FRONT PAGE - By WANG YAN­FEI and LI FUSHENG Con­tact the writ­ers at wangyan­fei@ chi­

China plans to open the do­mes­tic mar­ket wider to for­eign in­vest­ment in sev­eral key sec­tors, and the man­u­fac­tur­ing of new en­ergy ve­hi­cles and the fi­nan­cial sec­tor are among the pri­or­i­ties for lib­er­al­iza­tion in com­ing months, a spokes­woman for the na­tion’s eco­nomic reg­u­la­tor said on Fri­day.

Meng Wei, of the Na­tional De­vel­op­ment and Re­form Com­mis­sion, said China will open the world’s sec­ond­largest econ­omy wider to for­eign in­vestors, step­ping up ef­forts to at­tract more for­eign funds.

She said the gov­ern­ment will stick to its pledges to cre­ate a more fair and open busi­ness en­vi­ron­ment and will make use of the ex­pe­ri­ence gained in free trade zones in other parts of China.

Her com­ment came af­ter the State Coun­cil in June re­moved 27 re­stric­tions from its neg­a­tive list for for­eign in­vest­ment in free trade zones. A neg­a­tive list out­lines ar­eas where in­vest­ment is pro­hib­ited; all other ar­eas are pre­sumed to be open.

For­eign in­vestors ben­e­fit from more flex­i­ble reg­u­la­tions and more mar­ket ac­cess in free trade zones.

En­ter­prises in sec­tors that can help the na­tion ad­vance through in­dus­trial up­grades are ex­pected to take the lead in fu­ture pref­er­en­tial poli­cies, ac­cord­ing to ex­perts.

As China puts high em­pha­sis on sus­tain­able de­vel­op­ment and mov­ing away from re­ly­ing on old smoke­stack in­dus­tries, grant­ing more mar­ket ac­cess to for­eign com­pa­nies in such sec­tors as new en­ergy ve­hi­cles is a fu­ture trend, ac­cord­ing to John Zeng, manag­ing di­rec­tor of LMC Au­to­mo­tive Shang­hai.

Zeng cites the ex­am­ple of a joint ven­ture ap­proved by the gov­ern­ment between Ger­many’s Volk­swa­gen and China’s JAC Mo­tors in May.

The two are work­ing to pro­duce elec­tric cars un­der a new brand. Zeng said he ex­pected there will be sim­i­lar joint ven­tures, which cre­ate a com­pet­i­tive en­vi­ron­ment and boost the in­dus­try as a whole.

Open­ing up the fi­nan­cial sec­tor might take longer, ac­cord­ing to Zhao Qing­ming, chief econ­o­mist at the re­search in­sti­tute of the China Fi­nan­cial Fu­tures Ex­change.

He said the gov­ern­ment may re­move the cur­rent 49 per­cent for­eign cap on se­cu­ri­ties com­pa­nies, but it is not likely in the short run be­cause much needs to be done to strengthen fi­nan­cial su­per­vi­sion to deal with pos­si­ble ex­ter­nal risks.

China has opened the door in ar­eas such as credit rat­ing ser­vices and has eased re­stric­tions on al­low­ing for­eign banks un­der­writ­ing gov­ern­ment bonds.

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