China’s commerce minister has sought to assuage concerns that overseas enterprises will withdraw from the Chinese market as foreign relations worsen in the wake of the COVID-19 pandemic.
In response to a question concerning the prospect that some foreign-invested enterprises could leave China, Zhong Shan (钟山), head of the Ministry of Commerce (MOFCOM), said that “I believe smart enterprises will not abandon a massive market like China’s.”
“China has very marked advantages for the use of foreign capital…China has a rich, high-quality labour force, China has complete industrial allocation capability, and China has a market of 1.4 billion people.”
Zhong made the remarks at a State Council press conference held on 18 May.
When asked about measures that MOFCOM would adopt to “stabilise foreign investment,” Zhong Shan said that “the spread of the global pandemic has certainly impacted global cross-border investment, and China’s use of foreign capital faces huge challenges.”
Zhong outlined three key work areas for stabilising foreign investment:
- Further expanding opening, and “continually loosening market entry [requirements], contracting the negative investment list, and expanding opening of the services sector.” Zhong pointed in particular to further opening of the old industrial bases of middle and western China to foreign investment.
- Properly establishing platforms for opening, such as free trade pilot zones and ports, which Zhong referred to as the “new heights of a new era of reform and opening.” Zhong points out that China has established 18 free trade pilot zones since 2013, that account for 15% of all of China’s use of foreign capital. “The next step will be further expanding the scope of free trade pilot zones, and giving free trade pilot zones greater independence for reform.” Zhong also flagged hastening of the creation of the Hainan free trade port.
- Optimisation of the commercial environment. Zhong said that China’s international ranking as a commercial environment increased from 46 to 31 in 2019, and that in 2020 China would focus on implementation of the “Foreign Commercial Investment Law” (外商投资法) to “operate a fair competitive market environment, protect the lawful rights and interests of foreign commerce, protect intellectual property rights, strengthen the long-term confidence of foreign commerce when investing in China, and making foreign commerce willing to come, stay and develop.”