China to ease for­eign in­vest­ment re­stric­tions; FDI rose 3% in 2018

Han­dling Sino-US trade fric­tions is ma­jor task in 2019: Min­is­ter

Kuwait Times - - Business -

SHANG­HAI/BEI­JING: China will re­duce re­stric­tions on for­eign in­vest­ment and ad­dress dif­fi­cul­ties fac­ing for­eign com­pa­nies in­vest­ing in the coun­try, the com­merce min­is­ter said, ac­cord­ing to a tran­script of an in­ter­view he gave to state me­dia.

Com­merce Min­is­ter Zhong Shan said China would al­low full for­eign own­er­ship of com­pa­nies in more ar­eas of the econ­omy and would re­duce the num­ber of in­dus­tries in which for­eign in­vest­ment was re­stricted or barred, ac­cord­ing to the tran­script posted on the Min­istry of Com­merce’s web­site yes­ter­day. The com­ments ap­peared to be largely re­it­er­a­tions of past pledges by Chi­nese of­fi­cials for fur­ther mar­ket open­ing.

For­eign di­rect in­vest­ment (FDI) into China rose by 3 per­cent year-on-year to $135 bil­lion in 2018, Zhong said. That would mark a slow­down from growth rates of 7.9 per­cent in 2017 and 4.1 per­cent in 2016.

But Zhong said China had main­tained stable FDI growth “against a gloomy global cli­mate,” not­ing that to­tal FDI around the world had slumped by 41 per­cent in the first half of last year.

China has been push­ing to broaden op­por­tu­ni­ties for pri­vate firms and for­eign in­vestors to stim­u­late an econ­omy that is slow­ing on the back of weak­en­ing do­mes­tic de­mand and a trade war with the United States. Zhong said “prop­erly han­dling” trade fric­tions with the United States was a ma­jor task for the min­istry in 2019.

The min­istry would “con­sci­en­tiously im­ple­ment” the con­sen­sus to work to­ward a res­o­lu­tion of the trade row reached by Chi­nese Pres­i­dent Xi Jin­ping and US coun­ter­part Don­ald Trump in Ar­gentina late last year, he added. The two sides held three days of trade talks at a vice-min­is­te­rial level in Bei­jing last week.

Zhong said the Com­merce Min­istry would push for the in­tro­duc­tion of a for­eign in­vest­ment law as soon as pos­si­ble, im­prove the han­dling of com­plaints from for­eign firms, and en­cour­age for­eign in­vest­ment in man­u­fac­tur­ing and high tech.

The min­istry would also en­cour­age for­eign­ers to in­vest in cen­tral and western China, he said.

China will roll out a se­ries of mea­sures to main­tain stable em­ploy­ment this year, the of­fi­cial Xin­hua news agency re­ported yes­ter­day, cit­ing the coun­try’s hu­man re­sources min­istry.

China is grap­pling with the im­pact of a slow­ing econ­omy amid a dam­ag­ing trade dis­pute with the United States, its largest trad­ing part­ner, and sources have said it plans to set a lower eco­nomic growth tar­get of 6 to 6.5 per­cent in 2019, com­pared with “around” 6.5 per­cent in 2018.

In or­der to en­sure em­ploy­ment, the Chi­nese gov­ern­ment will re­duce the bur­den on com­pa­nies, of­fi­cials from the Min­istry of Hu­man Re­sources and So­cial Se­cu­rity said, ac­cord­ing to Xin­hua, adding that re­search on plans to cut their so­cial in­sur­ance premium rate would be ac­cel­er­ated.

“En­ter­prises with fewer or zero lay­offs can take half of the pre­vi­ous year’s un­em­ploy­ment in­sur­ance premium back,” Xin­hua quoted an un­named se­nior min­istry of­fi­cial as say­ing, re­it­er­at­ing a pol­icy that was flagged by the State Coun­cil, China’s cab­i­net, in De­cem­ber. Xin­hua said China’s ur­ban un­em­ploy­ment rate was 3.8 per­cent by the end of 2018, with 13.61 mil­lion new jobs cre­ated in ur­ban ar­eas last year, up 100,000 from 2017.

In com­ments pub­lished on Satur­day, Chi­nese Premier Li Ke­qiang said planned tax cuts tar­get­ing smaller com­pa­nies would help sup­port em­ploy­ment and eco­nomic sta­bil­ity.

“For 2019, China still faces large em­ploy­ment pres­sure, with more than 15 mil­lion newly-added job-seek­ers in ur­ban ar­eas, in­clud­ing a record num­ber of 8.34 mil­lion col­lege grad­u­ates ex­pected,” the hu­man re­sources min­istry of­fi­cial added.

Col­lege grad­u­ates, mi­grant ru­ral work­ers and veter­ans should be given tar­geted as­sis­tance in find­ing jobs, the of­fi­cial said, adding that more skills train­ing chan­nels should be opened for the un­em­ployed. —Reuters

SHANG­HAI: A woman walks on a pedes­trian bridge in Shang­hai’s Lu­ji­azui fi­nan­cial dis­trict. —AFP

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