New rules set to boost investor confidence

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The booth of Schneider Electric during an expo in Shanghai (PROVIDED TO CHINA DAILY)

Multinational corporations say they will deepen ties with their partners in China and seize the opportunities on offer, given that the country has removed all foreign investment restrictions in manufacturing. This became clear in this year’s version of the negative list for foreign investment access.

The shortened negative list underlines China’s determination to fulfil its commitment to expand high-standard opening-up and will contribute to a more favourable business environment and consolidate the confidence of foreign investors, officials, experts and executives of foreign-funded companies said.

The new list, jointly issued by the National Development and Reform Commission and the Ministry of Commerce, will take effect on 1 November and reduce the number of restrictions from 31 to 29, achieving zero restrictions in manufacturing.

The country’s latest measures to expand foreign investment access in manufacturing are of vital significance in establishing a modern industrial system and building more open and resilient industrial and supply chains, the Ministry of Commerce said.

The move will help attract more foreign investment in advanced manufacturing and high-tech industries, improving the investment structure and accelerating the growth of new quality productive forces, and will give strong impetus to the country’s high-quality economic growth, the ministry said.

Senior executives of foreign-funded companies said the move will help improve the long-term business environment for foreign companies in China.

Ian Shih, president of Rockwell Automation China, said the US industrial automation company appreciates China’s commitment to expanding high-standard opening-up and deepening reforms in foreign investment, and that these initiatives provide a favourable business environment for the long-term growth of foreign companies in China.

“Rockwell Automation remains committed to advancing technological progress in collaboration with local partners,” Shih said. “Through close collaboration we actively promote the large-scale application of emerging technologies such as 5G, artificial intelligence and the industrial internet of things in China.”

Rockwell Automation is committed to helping Chinese partners improve their core competitiveness and aiding in the high-quality development of China’s manufacturing, he said.

Tetsuro Homma, executive vice-president of Panasonic Holdings Corp, said the significant measures taken by the Chinese government to achieve high-quality development will help foreign companies better seize opportunities, strengthen their presence and increase their investment in China.

“I have always believed that China is not only a manufacturing giant and a major consumer market, but also an innovator with exceptional engineering talent,” Homma said.

Ji Jianjun, a researcher at the Chinese Academy of Macroeconomic Research in Beijing, said the implementation of the latest version of the negative list will not only provide broad space for deeper international collaboration in industrial and supply chains but also create enormous opportunities for multinationals to invest in the country.

Zhu Keli, founding director of the China Institute of New Economy, said the country has sent a clear signal that it is committed to further opening up its economy to the outside world and creating a world-class and market-oriented business environment governed by a sound legal framework.

The removal of restrictions on foreign investment in manufacturing is an essential requirement of China’s economic transformation and upgrading and will attract more foreign capital into high-end manufacturing, research and development and design, and help the country move up the value chain, Zhu said.

In the first half of this year 26,870 new foreign-invested companies were established in China, 14.2 per cent more than in the corresponding period last year, the Ministry of Commerce said.

“With the new policy facilitation we will continue to deepen our presence in China and increase investment in new energy projects,” said Ren Jing, senior vice-president of Schneider Electric, a French industrial and technology group.

Karen Chen, managing director and chairman of Singapore Exchange China, said, “China’s reform and opening-up policies are not just offering increased investment and partnership prospects for businesses worldwide, but are also stimulating global economic expansion and contributing to the pursuit of sustainable development globally.”