China to improve access for foreign companies ‘A new round of high-level opening up’
China’s State Council, or cabinet, said yesterday the country is committed to improve access for foreign companies in China, as part of “a new round of high-level opening up”. According to a statement released yesterday following a State Council meeting chaired by Premier Li Keqiang, the Chinese government will create an environment for fair competition for foreign firms. “It’s important part of pushing forward a new round of high-level opening up,” the statement said.
In the future, except for certain sensitive industries in which access for foreign companies is restricted, foreign investments would only require registration, rather than approval. The statement did not offer details on how the new system would work. It also said the Chinese government would take further steps to improve market entry for foreign companies.
The State Council’s statement comes at a time when the foreign business community in China has become highly critical of the current unbalanced access for foreign companies in China. Last month, a top European business lobby warned China that it risked a protectionist backlash unless it opened its markets faster to foreign investment. Progress on China’s economic reforms has been “highly disappointing”, the European Union Chamber of Commerce in China said in an annual paper, released as China prepared to host leaders from the world’s biggest economies at last month’s G20 summit in Hangzhou.
Forex reserves fall
China’s mountain of foreign exchange reserves dropped around $19 billion in September to a five-year low, government data showed, with the central bank spending heavily to defend its currency against capital outflows. The world’s largest currency hoard fell to under $3.17 trillion, the People’s Bank of China (PBOC) said on its website Friday, below median analyst forecasts of $3.18 trillion in a Bloomberg News survey.
It was the third straight month of declines and brought China’s reserves to their lowest level since April 2011, Bloomberg said. Analysts said the decline indicated China was selling foreign exchange to buy its yuan currency amid capital flight spurred by slowing growth in the world’s second largest economy. The data came days after the yuan’s official entry into the International Monetary Fund’s elite SDR basket of currencies, a symbolic coup for Beijing policymakers who are seeking to expand international use of the currency.
In the months preceding the currency’s formal inclusion, China’s central bank spent “heavily” to keep the yuan’s value stable, roughly $27 billion last month, said Julian Evans-Pritchard of Capital Economics. But “with the inclusion of the renminbi in the SDR basket now complete, the PBOC may no longer feel the need to intervene as heavily to counter capital outflows”, he said, adding that US Federal Reserve rate hikes could increase depreciation pressure on the yuan in coming months.
In other news, China wants to start talks on a feasibility study for a free trade agreement with Colombia as soon as possible, China’s foreign minister said during a visit to the South American country, where he also offered support for its peace process. China is not a big diplomatic player in the region despite being a major commodities buyer there, but already has free trade pacts with Peru, Chile and Costa Rica.
President Xi Jinping will attend a summit of the Asia Pacific Economic Cooperation (APEC) bloc in Peru next month and is also expected to visit several other Latin American nations. Chinese Foreign Minister Wang Yi said during a visit to Colombia that China would maintain close communications with Bogota to start substantive talks on a free trade agreement feasibility study as early as possible, China’s Foreign Ministry said yesterday. The statement provided no details.
Colombian President Juan Manuel Santos won the 2016 Nobel Peace Prize on Friday for his efforts to end a 52-year-old war with Marxist guerrillas, a surprise choice and a show of support days after voters rejected a peace deal he signed with the rebels. Wang said that, as a permanent member of the United Nations Security Council and a good friend of Colombia’s, China would continue to support the peace process.
“China upholds that all hot button issues in the end should be resolved via peaceful negotiations. Force cannot resolve problems, only bring more harm and even hate,” the ministry paraphrased Wang as saying. Wang also congratulated Santos on winning the Nobel prize, the statement added. China has a difficult relationship with the Nobel Peace Prize and reacted with fury when it was awarded to prominent Chinese dissident Liu Xiaobo in 2010. Exiled Tibetan spiritual leader the Dalai Lama, a man accused by Beijing of being a dangerous separatist, is a fellow peace prize laureate. —Agencies
HONG KONG: This file photo taken on July 6, 1998 shows Hong Kong flag carrier Cathay Pacific Boeing 747-400 jumbo jet, flying over the Kai Tak Airport control tower (bottom) as it approaches Runway 13 on the last day of the 73-year-old airport. —AFP