Li Keqiang Commits to Unrestricted Capital Flows for Foreign Investors
Chinese Premier Li Keqiang has sought to heighten China’s lustre in the eyes of foreign investor by reassuring them that there will be no restrictions on the withdrawal of capital from the economy.
Speaking at the Davos Forum on 27 June, Li that while China would encourage foreign-invested enterprises to to re-invest their profits within the country, it is also committed to allowing any such companies to withdraw their China-based profits in full at their complete discretion, without being subject to any capital restrictions.
Li’s Davos speech dwelt at length on the importance of globalisation, free trade and financial liberalisation to the world’s economic health.
“Globalisation brings opportunities to all people and all countries,” said Li. “We should better adapt to and guide globalisation, maintain the authority and effectiveness of multi-lateral institutions, and expedite the freedom and ease of trade and investment.
“Currently people are discussing the issue of ‘fair trade.’ In actuality free trade is the foundation of globalisation, and the prerequisite for fairness of trade. Restricting trade freedom will bring unfair trade, as fair trade is intrinsic to free trade.”
To this end China will “actively expand openness to the outside,and create an internationally competitive business environment.
“We will establish a new open economic model that is suitable for economic globalisation and the new industrial revolution, and further loosen market entry threshold into the services and manufacturing sector, loosen foreign investment share percentage restrictions in those sectors that have drawn the attention of overseas business for many years…and support policies that treat domestic and foreign-invested enterprises equally.”
“We will also provide support to multi-national companies to establish their regional headquarters in China, and guide investment in China’s western region and old industrial base in the north-east, which harbours huge potential.
“Over the next five years China will import USD$8 trillion in commercial goods. The Chinese economy is improving over the long-term, becoming more open with each day, and will bring even more opportunities to countries around the world, as well as continue to be the most appealing investment destination.
“We welcome the industrial and commercial sectors of all nations to come to China to invest in emerging industries and jointly grow with the Chinese economy.”