Foreign capital volume reaches new high in China

Opening to the outside world and attracting foreign capital are the important content of China’s basic state policy. Chinese President Xi Jinping has emphasized many times that the policy of China utilizing foreign capital will not change, nor will the protection of legal interests of foreign-invested enterprises and the direction of providing better service for enterprises of all the countries investing in China. In 2015, in the situation of increasingly fierce competition of international foreign capital attraction, big difficulties and challenges of the downward pressure of the domestic economy, the foreign capital volume of China creates new high and the quality of how to use foreign capital will be further improved.

The scale of foreign capital attraction increases rapidly and the quality is improved steadily. Firstly, the scale of foreign capital attraction is promoted steadily. In January-November 2015, China set up 23,648 foreign-invested enterprises, with an increase of 11% year on year. The actual use of the foreign capital reached RMB 704.33 billion(equal to US$114.04 billion, not including the data from bank, security and insurance fields, the same below), with an increase of 7.9% year on year. It is estimated that China will absorb US$126 billion foreign capital, creating a new high. Secondly, the investment from major countries or regions in China remained stable as a whole. Countries and regions (Hong Kong, Singapore, Taiwan, South Korea, Japan, the United States, German, France, Britain and Macao) whose actual investment amount rank the top 10 invest US$107.31 billion, with an increase of 7.3% year on year, accounting for 94.1% of the national actual use of the foreign capital (the above data including the investment from British Virgin Islands, Cayman Islands, Samoa, Mauritius and Barbados free port to China). Thirdly, the structure of foreign capital attraction continues to be optimized. The actual use of foreign capital of service industry reached US$69.58 billion, with an increase of 18.8% year on year, accounting for 61% of the national total, marking an important growth point of the foreign capital attraction. The actual use of foreign capital of manufacturing industry reached US$35.84 billion, just like the corresponding period of 2014. The actual use of foreign capital of high-tech manufacturing industry was US$8.54 billion, with an increase of 11.7% year on year. Fourthly, the mode of foreign capital attraction is constantly innovated. The actual use of foreign capital in the mode of merger and acquisition was US$16.82 billion, with an increase of 181% year on year and a proportion rising from 5.6% at the same period of last year to 14.7%. Fifthly, the foreign capital attraction in the free trade pilot sites obtains remarkable achievements. In January-October, the free trade pilot sites in Guangdong, Tianjin and Fujian set up 5,159 foreign-invested enterprises in total, doubling its increase year on year. The foreign investment absorbed by Shanghai free trade pilot site after its expansion accounted for a half of the total amount of the whole city. The industrial structure was continuously optimized and the trend that the high-end industries such as financial leasing, scientific research and development, venture capital investment, e-commerce and modern logistics had been gathering at the free trade pilot sites was obvious.

The reform of the foreign investment system is pushed forward at a faster speed. The “three laws of foreign investment” is promoted to be amended and the Foreign Investment Law (Draft) is drawn up by taking advice in public so as to provide a stable, transparent and expectable legal environment for foreign investors. Efforts have been made to explore and implement the managerial mode of the negative list of pre-established national treatment in the four free trade test sites, to fully implement the Agreement of Realizing Free Trade Liberalization of Hong Kong and Macao in Guangdong Province in terms of Arrangement on Establishing Closer Trade and Economic Relationship between Mainland and Hong Kong and Macao, and to implement the negative list management to eligible service providers who invest in the service trade field in Guangdong. According to the requirements of the registration system of the registered capital of the State Council, amendments have been conducted to some clauses of 29 regulations and regulatory documents, the lowest requirements for the registered capital have been cancelled to further motivate the market vigor and development power. Efforts have been made to guide the filing work of the foreign investment of the free trade test sites and to strengthen the supervision during and after the process.

The construction of free trade test sites has been fully promoted. Approved by the Central Party Committee and the State Council, Shanghai Free Trade Test Pilot expands its scale, the other 3 free trade test sites of Guangdong, Tianjin and Fujian have been newly set up and beneficiary attempt has been made in the basic institutional aspect of many fields such as investment, trade, finance, supervision, entrepreneurship and innovation and regional strategy, which form a comprehensive reform situation. Efforts have been made to set up the joint conference system of working group of free trade test sites of the State Council, and to grasp and implement all kinds of reform measures of free trade test sites. Efforts should also be made to further promote the innovative pilot plan of finance openness of Shanghai free trade test site and financial innovative policies of Guangdong, Tianjin and Fujian free trade test sites, and to provide a new batch of replicable pilot suggestions.

The opening pace in all fields has been further quickened. Firstly, efforts have been made to work with National Development and Reform Commission to amend and issue the Guidance Catalogue of Foreign Investment Industries (2015 Amendments), to reduce a half of the restrained amount and to further broaden the limit of the proportion of shares of foreign investment. Secondly, efforts have been made to introduce a negative list uniformly applicable to the four free trade test zones. The items of the negative list have been reduced from 139 to 122. Thirdly, efforts have been made to carry on expanding open and comprehensive pilots of service industry in Beijing and to take the lead in promoting the expansion and openness in six major fields such as science, technology and service. Fourthly, efforts have been made to actively promote the opening of service industry under the framework of CEPA and to basically realize the service trade liberalization to Hong Kong and Macao in Guangdong province. Fifthly, efforts have been made to cancel the restrained measures of foreign investment access in the fields such as advertisement and operated e-commerce, to optimize the managerial measures of real estate of foreign investment and to improve the level of investment facilitation.

Efforts have been made to promote the construction of the platform of foreign investment attraction carrier, to carry out and implement the Opinions on Promoting Transformation and Upgrading and Innovative Development of National Economic and Technological Development Zone by the General Office of State Council ,and to implement the innovative development project of national economic development zones. Approved by the State Council, the open and innovative comprehensive test has been conducted in Suzhou industrial park to create an upgrading version of the Chinese development zone. Besides, efforts have been made to promote to establish the innovation development union of development zones among Beijing, Tianjin and Hebei provinces and to push forward the close cooperation and coordinative development of the national economic development zone of the Economic Belt of Yangtze River.

Regional coordinative development has been promoted. Efforts have been made to actively implement the integration project of the markets of Beijing, Tianjin and Hebei and the business leading project of the Economic Belt of Yangtze River. This is to promote the national strategies such as the coordinative development of Beijing, Tianjin and Hebei and the development of the Economic Belt of Yangtze River. Efforts have also been made to build the joint conference working mechanism of the development working group of the frontier economic cooperative zones and the cross-border economic cooperation zones, so that the opening and development pace of the border areas will be accelerated. The Joint and General Plan of Construction of Chinese Mohan and Laotian Boten Economic Cooperative Zone has been officially signed to improve the trade and economic cooperation of the two countries.

The 5th Plenary Session of the 18th Central Committee of Chinese Communist Party proposed that efforts should be made to improve a legal, international and convenient business operation environment, to fully implement the managerial mode of the negative list plus pre-establishment national treatment and to promote the equal treatment to both domestic and foreign enterprises and to promote the fair competition. The just completed Central Economic Working Conference also clearly put forward that efforts should be made to improve the environment of making full use of foreign investment, to pay high attention to protecting the legal rights of foreign enterprises and the intellectual property right and to treat both domestic and foreign enterprises equally and fairly. According to the deployment of the Central Committee and the State Council, the MOFCOM will reform and innovate and forge ahead with determination to further expand the opening up in all fields, constantly optimize the environment of foreign investment, enhance the confidence of investors and further improve the quality of using foreign investment.

Source: http://english.mofcom.gov.cn/article/newsrelease/significantnews/201601/20160101236042.shtml

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