(Graphics/GT)
More 'globalization and investment liberalization' will attract capital: experts
The Chinese government is beefing up efforts to ease restrictions on foreign investment in sectors including services, manufacturing and mining, in a bid to confront challenges and competition in the world market.
The country is advancing the opening-up of financial institutions as well as other services like auditing, architectural design and rating, the Ministry of Commerce (MOFCOM) said on Thursday, citing the 7th revision to the foreign investment industry catalogue.
China has utilized foreign investment in its services industry cautiously in previous years by putting curbs on foreign investors' ownership ratios and investment methods, said Sang Baichuan, director of the Beijing-based Institute of International Business at the University of International Business and Economics.
"As China's competitiveness in the services sector has risen, the country is now in need of foreign capital. Foreign investment could help those industries develop as well as offer support for the real economy," Sang told the Global Times on Monday.
During the first 11 months of 2016, foreign direct investment (FDI) in China reached 731.8 billion yuan ($105.6 billion), an increase of 3.9 percent from the same period last year, data from the MOFCOM showed.
FDI in the services sector rose 8 percent during the same period on a yearly basis, and accounted for 70.1 percent of total FDI.
Ministries made joint efforts in late December and rolled out a series of measures to boost FDI, Wang Shouwen, vice minister with the MOFCOM, told a briefing on Friday.
The MOFCOM and the National Development and Reform Commission issued a draft seeking public input for the revision to the foreign investment industry catalogue on December 7.
The period for public opinion closed on Friday and the MOFCOM said it will speed up a final revision for the State Council, China's cabinet, for approval and release.
The number of domestic industries restricted to foreign investors will be reduced from 93 to 62, according to the catalogue.
Challenges remain
China is endeavoring to improve its business environment to attract foreign capital, but it also faces headwinds posed by global markets, experts said.
The primary challenge China faces is that global capital is flowing to the US as the dollar continues to strengthen, Chen Fengying, an expert at the Institute of World Economics Studies under the China Institute of Contemporary International Relations, told the Global Times Monday.
Also, as developed countries like the U.S. try to bring manufacturing jobs back home, the global investment situation may be restructured, Chen noted.
"Given the context, China will try hard to nurture its advantages. For instance, the country has a large consumption market with rising demand for modern services and it has improved industrial supporting capacity, which are indeed attractive to foreign capital," noted Sang.
Advancing globalization
China will also advance globalization and investment liberalization to attract foreign investment, Sang said.
Although the world market has recently seen an increase in anti-globalization and protectionism, China's opening-up policy will remain consistent and the country is committed to further opening up its market to foreign investment, MOFCOM vice minister Wang said.
"For industries where the government encourages foreign investment, preferential policies about tax and land use will be provided to investors," said Sang.
The Chinese government will adopt many measures to facilitate foreign business in China, including creating a level playing field, streamlining business registration as well as stepping up efforts to advance the issue of a negative list, Chen noted.
"We believe many areas of the Chinese economy would benefit from greater foreign investment. A long negative list that largely retains the existing restrictions and prohibitions, however, will do little to help China's economy. We continue to look forward to more meaningful opening," William Zarit, Chairman of the American Chamber of Commerce in China, told the Global Times on Monday.
