Xi urges opening market more quickly
Comments come at a critical time when progress needed: experts
President Xi Jinping’s recent call for opening China’s market more quickly by improving the investment and market environment for foreign companies highlighted a sense of urgency at the top about the country’s progress toward this goal as a self- imposed deadline is approaching, experts said on Sunday.
The comments come at a critical juncture in the middle of the country’s 13th Five- Year Plan ( 2016- 20). According to the plan, most reforms to open up the market should be completed by the end of the fifth year. To meet this goal, government agencies and local governments may accelerate actions to further open up their markets to foreign capital, experts said.
China should “create a stable, fair, transparent and predictable business environment, and speed up efforts to build an open economy in a bid to promote the sustainable and healthy development of the Chinese economy,” Xi said at a meeting of the Central Leading Group on Finance and Economic Affairs on Monday, according to the Xinhua News Agency.
Xi further said China should clear administrative hurdles for foreign investment and speed up efforts to open sectors such as child care, elderly care, architecture, design, accounting, auditing, logistics and e- commerce, Xinhua reported.
“China should continue to make good use of foreign investment to advance supply- side structural reforms, upgrade the economy, and catch up with global technology development,” Xi said.
Though such comments are not new among Chinese leaders, the timing might suggest top policymakers’ increasing impatience with lackluster progress in opening up markets, according to Chen Fengying, a research fellow at the China Institute of Contemporary International Relations.
“China has been saying that we will achieve a fully open market by the end of the 13th Five- Year Plan period. We only have less than three years and we are still far from achieving that goal,” Chen told the Global Times on Tuesday. “I think that’s what President Xi was driving at: a sense of urgency.”
Chen further pointed out that faced with many realistic issues in building an open market, local governments lack the motivation to pursue these reforms. “So this is President Xi reminding everyone that how important an open market is for our economy,” Chen said.
Actions to follow
Xi’s remarks on Monday will likely to be followed by some accelerated policy implementation in certain areas, experts noted.
“Of course, this was a high- level meeting. What the president says at these meetings could be considered a clear direction for policy implementation,” Wang Jun, an expert at the China Center for International Economic Exchanges, told the Global Times on Monday.
Wang noted that at the meeting, Xi urged specific efforts in areas where more work needs to be done to ensure market openness and fairness for foreign companies.
Xi stressed that China should soon consolidate laws and regulations on domestic and foreign businesses.
“All laws, rules and policies that are out of tune with the overall direction and principle of opening up should be abolished or revised within a time limit,” the president said, adding that national treatment in laws and policies should be granted to foreign companies after
they enter the Chinese market.
The president also said China should expand the “negative list” approach on foreign investment management which has been tested in the country’s pilot free trade areas to the whole nation as soon as possible.
“These are clear directions as to how the country would move forward in terms of market opening,” Wang said, noting that China has made sound progress in opening up efforts, but “what President Xi is calling for is something even broader and deeper.”
In the first half of 2017, China used a total of 441.54 billion yuan ($ 65.44 billion) in foreign capital, down 0.1 percent, according to data released by the Ministry of Commerce ( MOFCOM) on Thursday. In June, the country attracted 100.45 billion yuan in foreign investment, up 2.3 percent year- on- year, the data showed. Total new foreign- funded companies in the country increased 14.3 percent year- on- year to 2,894 in June.
The MOFCOM and the National Development and Reform Commission released a new guideline for foreign investment in the country, eliminating 30 restrictions on the previous guideline and relaxing regulations on services, manufacturing and mining sectors.
Wang said China has also made “recognizable” progress in protecting intellectual property. “Though there are still some small issues at some companies, overall intellectual property protection has been significantly improved in recent years,” he said.
Xi on Monday listed protecting intellectual property as an important area to ensure a “good business environment.”
“China has been saying that we will achieve a fully open market by the end of the 13th FiveYear Plan. We only have less than three years and we are still far from achieving that goal.” Chen Fengying Research fellow at the China Institute of Contemporary International Relations