Foreign share limitations in financial sector to end in 2020
China will scrap foreign shareholding limitations in its financial sector in 2020, a year ahead of schedule, Chinese Premier Li Keqiang said on Tuesday, giving fresh impetus to foreign investors eager to capitalize on the world’s second-largest economy that has opened its door even wider to the outside world.
China will also ease ownership limits for foreign investors in the auto sector and encourage foreign investments in manufacturing, while reducing its negative list for foreign investments, Li said in a keynote speech at the Annual Meeting of the New Champions 2019, also known as Summer Davos in Dalian, Northeast China’s Liaoning Province.
The opening-up pledge apparently speaks volumes for the nation’s drive toward globalization despite trade woes.
The world has benefited from globalization, the Premier stated, noting that China supports WTO reforms and adheres to free trade. China has been under great pressure and undergone travails amid efforts to push for globalization, he said, reiterating the nation’s steadfast push for continued opening-up.
His remarks were warmly received by forum participants. Seventy percent of this year’s forum participants come from outside China, and the US comes only after China in the number of attendees.
“It was a very positive speech, it indicated China’s strong determination to open up and reform. It included a number of specific promises, which is very encouraging. We look forward to seeing these promises fulfilled. If we do, I am sure we will see an increase in foreign business activity in China,” said Timothy Stratford, chairman of the American Chamber of Commerce in China and a former assistant US Trade Representative.
Li also vowed to enhance intellectual property rights (IPR) protection and create a market environment that treats all business ownership fairly.
Bigger tax and fee cuts were also a highlight of his speech. “When I met with businesses executives yesterday, they felt that bigger tax and fee cuts are the most efficient measures they have seen,” the Premier said, stressing that the government will honor all tax cut commitments. And instead of being spent on employee salaries and welfare, an amount of money thanks to the tax cuts has been invested in R&D, the Premier said.
It’s encouraging that the business community, rooting for the Chinese economy, is now considering a greater commitment to the market.
“We actually bring startups from Switzerland to China, so to have this message of a strong IPR and also on the investment side in a structured way is very beneficial,” said Felix Moesner, CEO of the Science Consul of the Consulate General of Switzerland in Shanghai.
“We really feel there are nice progresses going on and I think that the future holds even more opportunities, Moesner told the Global Times.
The Premier pledged support for the creation of a fairer investment environment and vowed efforts to cut taxes, lower tariffs and remove nontrade barriers – essentially encouraging the flow of capital, talent and goods. “This is fundamental to the viability and stability of the economy. It gives foreign businesses the confidence to up their stakes in the Chinese market,” said Yin Zheng, executive vice president of French energy management and automation firm Schneider Electric.
Aside from that, China’s growth woes appear to have been largely defused, despite the nation’s trade tensions with the US. Official data showed that the economy expanded 6.4 percent year-onyear in the first quarter, faster than expected.
“When the Summer Davos began here 13 years ago, who could have imagined that China could develop into a market with 1.3 billion mobile phones?” asked the Premier. He believes this indicates the market’s tremendous consumption potential.
In light of the size of the economy, an annual growth rate of around 6 percent is still impressive, and the push for quality growth and the government’s pledge to implement a prudent monetary policy clearly indicates the economy’s resolve to achieve long-term sustainable growth, Yin said.