On March 19, 2024, the State Council unveiled a pivotal strategy aimed at fortifying China’s position as a prime destination for foreign investment, namely the Action Plan for a Steady Advancement in Higher Opening-up and Strengthened Efforts to Attract and Leverage Foreign Investment” (referred to as “the Action Plan” as below). This comprehensive initiative marks a significant stride towards bolstering the nation’s global economic integration.
The Action Plan seeks to redress the existing imbalance in foreign investment distribution across China, which has traditionally favored the eastern and coastal regions. Here are the key highlights:
Expanded Market Access:
The Action Plan proposes a sweeping expansion of sectors open to foreign investment. Restrictions in critical areas such as telecommunications, banking, the bond market, insurance, and healthcare will be lifted, providing foreign investors with greater opportunities for market entry.
Supportive Policies Reinforcement:
Efforts will be intensified to attract foreign investment in strategic sectors such as advanced manufacturing, high technology, energy efficiency, and environmental protection. To this end, a suite of supportive policies including tax incentives, energy subsidies, and financial assistance will be extended. Notably, emphasis will be placed on attracting investment to the middle, northeastern, and western regions.
Enhanced Fair Competition Environment and Investment Services:
The Action Plan advocates for the elimination of barriers that impede fair competition. Measures will be implemented to refine bidding processes, ensure equitable participation of foreign enterprises in standard-setting, and enhance market oversight and regulatory enforcement. Moreover, service provisions for foreign enterprises will undergo enhancements.
Facilitation of Innovative Collaboration:
Initiatives will be rolled out to facilitate seamless data exchange between foreign subsidiaries and their headquarters. Additionally, efforts will be made to streamline international logistics for foreign businesses through improved visa services and transport infrastructure. Foreign enterprises will be incentivized to participate in national research and development initiatives and scientific-technological projects.
Strengthening Business Regulations:
Intellectual property protection measures will be bolstered, and regulations governing cross-border data transfers will be optimized. Piloting the implementation of international trade rules will be actively pursued.
To summarize, the Action Plan signifies a proactive push to elevate China’s openness to the global economy. By fostering a conducive environment for foreign investment, promoting fair competition, and facilitating innovative collaboration between domestic and foreign enterprises, the plan aims to propel the nation’s economic development and global integration.
These national-level measures are poised to offer robust support for foreign investments across various sectors, particularly for those eyeing opportunities in integrated circuits, biomedical, high-end equipment, finance, and insurance. The manufacturing sector, in particular, stands to benefit significantly from these initiatives, presenting promising prospects for market entrants in China.
