The 19^th China International Fair for Investment and Trade (CIFIT), which is known as the largest and most influential international fair for investment in the world, will be held in Xiamen from September 8 to 11, 2016. It will be themed on “Focusing on the Belt and Road and Promoting Bi-directional Investment”. As the sponsor of the event, the Ministry of Commerce will hold 12 themed activities during the fair, including the Symposium on International Industrial Capacity Cooperation and the 2016 Cross-Strait Economic & Trade Cooperation and Development Forum.

 

At the press conference on the 19^th CIFIT held on August 23, Wang Shouwen, Executive Deputy Director of the Organizing Committee of the CIFIT and Vice Minister of Commerce of PRC, said that China faces severer situation for attracting investment compared with that in last year and international competition for attracting investment is becoming fiercer. For the next step, the Ministry of Commerce will make study and relax the restrictions on access of foreign investment to a number of fields, such as education, culture and finance, and take a variety of measures, such as accelerating reform of foreign investment management system and improving investment environment, to create a stable, transparent and predictable investment environment for foreign investors.

 

Increasingly severe situation for attracting investment

 

Wang Shouwen said, “Under more severe domestic and international situations, China saw a relatively stable growth of attracted foreign investment, which should be mainly attributed to a series of measures recently taken by the central and local government.”

 

Specifically, Wang Shouwen said that the first is the positive progress made in the exploration to the opening-up of pilot free trade zones, for example, the effective operation of the investment management system centering on negative list management established in four pilot free trade zones in Shanghai, Guangdong, Fujian and Tianjin. The financial innovation aiming to lift restrictions on convertibility under the capital account and financial services has got a good result. China (Shanghai) Pilot Free Trade Zone has taken a lead to set up 28 modes that have been copied and promoted nationwide. The second is the further expansion of the opening-up of China. Last year, the Ministry of Commerce carried out comprehensive pilot program for opening-up of the service sector of Beijing and has basically realized free trade in services concerning Hong Kong and Macao throughout the whole country since June 1, 2016. The third is the continuously improved investment environment of China. For example, concerning registered capital of foreign-invested enterprises, the paid-in registration mechanism has been changed into subscription mechanism. At the same time, the central and local governments have enhanced the protection of intellectual property, improved the transparency of policies and strengthened the construction of an environment for fair competition to provide an increasingly improved environment for foreign investment.

 

The results of a survey of the United Nations Conference on Trade and Development indicated that, in the coming three years, China will continue to be one of the countries as the top destinations for foreign investment. The results of the surveys of the American Chamber of Commerce in China, European Union Chamber of Commerce in China and the Japan-China Investment Promotion Organization (JCIPO) also showed that most of interviewed foreign-invested enterprises are confident with the prospect of China’s market.

 

However, Wang Shouwen also said, “We must be aware of that the situation for attracting investment this year is severer compared with that in last year. The UNCTAD said that, although the global foreign investment increased by 20% last year, it may have a decline of 10% to 15% this year, meaning that the global competition for foreign investment will be fiercer.”

 

Restrictions on access of foreign investment to be further relaxed

 

Currently, foreign-invested enterprises contributes to nearly half of China’s foreign trade, one fourth of industrial output, one fifth of fiscal tax revenue and one seventh urban employment, and have become an important component of the open economy of China. These enterprises have greatly promoted the sustainable and sound economic development, the construction and improvement of market system as well as the industrial upgrading and technological advance of China.

 

“In the future, the Chinese government will accelerate the construction of a new system for open economy, promote further expansion of opening-up in different fields, greatly relax restrictions on foreign investment and continuously improve investment environment,” Wang Shouwen said about how to improve China’s comprehensive competitiveness in attracting foreign investment under the currently circumstance.

 

Wang Shouwen said that the Ministry of Commerce will make more profound study and relax the restrictions on access of foreign investment to education, culture, finance and even general manufacturing sectors and, especially, expand the open-up of the fields that have gone through the pressure test of negative list in the pilot FTZs.

 

The reform of foreign investment management system has been paid high attention. Wang Shouwen said, in the future, the reform will be further sped up. For example, the Ministry of Commerce is making study on promoting the negative list management mode practiced in the pilot FTZs nationwide. In addition, study on laws related to foreign investment is also an important task of the Ministry of Commerce, aiming to provide a stable, transparent and predictable legal environment.

 

In addition, Wang Shouwen said that the Ministry of Commerce is accelerating the revision and improvement of the catalogue of competitive industries for foreign investment in the central and western parts of China. In the future, China will continue to optimize the layout for foreign investment, encourage foreign investment in the central and western parts of China, and especially provide support for the transfer of processing trade to the western areas. At the same time, China will further improve the investment environment of the border cooperation zones, cross-border cooperation zones and key areas for opening-up along the borders.

 

Moreover, the Ministry of Commerce attaches great importance to the comments and suggestions of foreign investors on China’s investment environment. According to Wang Shouwen, the Ministry of Commerce will hold a symposium attended by representatives of more than 50 multinationals during the 19^th CIFIT to listen to the comments and suggestions of foreign-invested enterprises on China’s investment environment, aiming to create a fairer competition environment for foreign investors and make and carry out more stable, predictable and transparent policies to a create an increasingly improved environment for foreign-invested enterprises.

 

(Source: Translated from Invest Guangzhou, August 24, 2016)