State Council Wants China’s Economy to Be “Comprehensively Open”

A regular meeting of China’s State Council convened by Premier Li Keqiang on 30 May has flagged greater opening of the economy to foreign investment and consumer products.

The meeting confirmed “further active and effective use of foreign capital…advancing the expansion of opening and expediting upgrade of the economy.”

The meeting also announced that China would “reduce import tariffs on daily consumer goods across a considerable scope, in order to better satisfy the diversified consumption needs of the masses.”

“[China] must operate a fairer, more transparent and convenient foreign investment environment, advance the formation of new, comprehensively open conditions, and strive to maintain China’s status as a primary destination for global foreign investment.”

To this end the State Council confirmed several measures including:

i) Loosening of market entry thresholds.

This will include the cancellation or loosening of restrictions on foreign investment in key manufacturing sectors such as automobiles, ships and aircraft.

China says it will also improve the qualified foreign investor system, actively attract overseas traders to participate in crude oil and iron ore futures transactions, and support foreign-invested financial institutions to participate more  in the underwriting of local government bonds.

ii) Raise the ease and convenience of investment to match international benchmarks.

Prior to 1 July China will draft and release a new foreign investment negative list, which will see authority over the establishment and amendment of foreign-invested enterprises involving a total investment sum of under USD$1 billion delegated to province-level governments.

Approval procedures for introducing foreign expertise will be simplified, with visas issued in as little as two working days.

iii) Protection of the lawful rights and interests of foreign investors.

The State Council said it will strike against infringements of commercial secrets, malignant use of trademarks and other rights infringements.

Beijing also plans to “significantly raise the statutory compensation ceiling for infringements of intellectual property rights.”

iv) Strengthen the role of state-level development zones as key platforms for the use of foreign capital, serving as an example to drive increases in the level of usage of foreign investment.

v) Improve and effectively use credit, land-usage and social welfare policies, reduce enterprise operating costs.

The State Council hopes to guide more investment towards China’s central and western regions, as well as towards the ¬†agricultural and services sectors and advanced manufacturing.

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