China to further relax foreign investment
Nation adds 12 more areas to list of loosened restrictions
China will reduce restrictions on foreign investments in 12 areas in the country in a recently launched guideline to promote overseas investment growth, a government official said Friday.
The 12 areas include new-energy cars, ship design, international maritime shipping, banking and securities, Wang Shouwen, vice minister of commerce, announced at a press conference, accord- ing to the website of the State Council Information Office on Friday.
China currently adopts strict requirements on foreign shareholders’ equity. For example, in terms of new-energy car companies in China, foreign investors are not allowed to hold more than 50 percent of company shares, Wang said.
The government will also open new investment areas to overseas investors, Wang added. For example, foreign investors will be allowed to run Internet access services.
Wang also said that government will set a timetable (for relaxing the restrictions) to make sure that the policy is properly implemented.
The government will take other measures, such as increasing visa types for foreigners to boost overseas investments in China, Wang said.
Xu Hongcai, deputy chief economist at the China Center for International Economic Exchanges, said that the guideline shows China’s determina- tion to go against the global protectionist trend.
“Further opening-up can benefit China in several ways. First, overseas investors would bring in advanced technologies and management. Second, it could force domestic companies to reform because they will be facing fiercer competition,” Xu said on Friday.
He also noted that introducing overseas investments can help balance the trade gap China enjoys with some countries and regions, like the US.
According to a report auditing firm PricewaterhouseCoopers (PwC) sent to the Global Times, foreign inbound investment as of June was at its highest level in two years due to larger deals and increased investments from Japan.
Wang noted that overseas companies face the same competition as State-owned companies and private enterprises, dispelling market concerns that overseas investors are still forbidden from entering many highly profitable industries.