Nation to open further for foreign investment

China will further open its doors to overseas investors by lowering the market access threshold and optimizing the investment environment, the Ministry of Commerce said on Thursday.

The remarks came after the United States passed a bill on Dec 2 to drastically cut tax for corporations, reducing tax rates from 35 percent to 20 percent, the lowest level in three decades.

“Many economies, especially emerging economies, expressed concerns over the US tax cut policy as it may result in capital outflows, increase difficulties in attracting foreign investment and even trigger financial turmoil,” said ministry spokesman Gao Feng.

Tax policies are just one factor affecting foreign companies’ investment decisions, but not the decisive one, he explained.

“The decision includes factors like the stability of the host country’s macro economy, market potential and the business environment.”

Gao said China’s relatively complete industrial chains with qualified industrial workers, the mid to high rate of economic growth, and the huge domestic market are attractive to foreign investors.

The ministry’s data shows that from January to November, 30,815 new foreign-invested companies were set up in China, up by 26.5 percent year-on-year. In the same period, its foreign direct investment reached 803.62 billion yuan ($121.57 billion), up 9.8 percent yearon-year.

In November alone, foreign direct investment surged 90.7 percent year-onyear to 124.9 billion yuan.

“The tax cut, on the one hand, will benefit Chinese companies to export and invest outbound,” said Liao Qun, chief economist and head of research at China CITIC Bank. “But on the other hand, it may cause US companies in China to leave the country, but how big the impact will be is hard to predict, so we don’t need to worry too much about it.”

Speaking of outbound investment, Gao said China will continue to encourage Chinese firms to invest in the US, and hopes the US can fulfill its promise to create a stable environment for investors from other countries including China.

“We hope the US won’t set obstacles for investors during the assessment of deals,” said Gao.

According to the ministry, China’s outbound investment in the US has been growing rapidly in recent years. Currently, Chinese companies have invested in 46 states, creating more than 141,000 jobs in the US.

China’s total overseas direct investment slumped 33.5 percent year-on-year to $107.55 billion in the first 11 months of 2017, according to the Ministry of Commerce. But the share of Chinese companies’ investment in countries and regions related to the Belt and Road Initiative in the country’s total ODI grew to 11.5 percent, 3.2 percentage points more than the same period last year.

We hope the US won’t set obstacles for investors during the assessment of deals.”

Gao Feng,