China to fur­ther re­lax for­eign in­vest­ment

Na­tion adds 12 more ar­eas to list of loos­ened re­stric­tions

Global Times - Weekend - - FRONT PAGE - By Xie Jun

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.

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