Page 82 - 2018 White Paper on the Business Environment in China
P. 82
8 White Paper on the Business Environment in China
1.5 Economic Reform
Background Germany trade amounted to $180.3 billion in 2016.
China overtook the United States as Germany’s top
Beijing encouraged an outward strategy trading partner. Beyond Germany, the broader Europe
for Chinese investment for several is also witnessing an increasingly active and fruitful
years, but the sharp decline in China’s foreign reserves cooperation with China. Trade between China and the
beginning in 2015 led the financial authorities to believe E.U. grew by 3 percent year on year to over $525 billion in
these investments had gotten out of control. The People’s 2016. Ruan Zongze, Vice President of the China Institute
Bank of China (PBOC), the country’s central bank, warned of International Studies, told Xinhua that against the
that some deals were putting China’s financial system at backdrop of a gloomy world economic growth, China’s
risk. The pressure to cut back has eased more recently as expressed a willingness to establish closer ties with the
capital flight diminished. A general perception was that the rest of the world. For example, China has established
bulk of China’s outward investment was going to the United railway connections with five of its 14 neighbors and the
States. That wasn’t really true. Only about 2 to 3 percent number is expected to increase. It has been the largest
of China’s outward investment over the past decade has source of outbound tourists since 2013, contributing
been going to the U.S.. Most of it landed on European more than 13 percent to global tourism revenues. A
shores. Economic factors partially explain Europe’s higher report from the United Nations Conference on Trade and
levels, but political sensitivities also play a role. For Chinese Development (UNCTAD) said that China received $139
companies, the E.U. also represented an easier market to billion of foreign direct investment in 2016, ranking third
penetrate because it offers a greater choice of partners. in the world just behind the United States and Britain.
Security concerns are also more contentious in the U.S.. Also in 2016, Beijing amended laws on foreign investment
China’s success in Europe may soon be slowing down. In and rolled out measures to further simplify approval
recent years, officials in the U.K., France, and Germany have procedures for foreign companies. China will continue
expressed concerns about Chinese acquisitions. The best to be one of the most alluring destinations for foreign
way to deal with these issues is bilateral investment treaties investment due to its fast growth and easier access, said
(BITs). Particularly important is liberalizing the negative James Zhan, a UNCTAD official in charge of investment
list for foreign investment, which is the focus of the BIT. and enterprise. “China will keep its door wide open and
Brexit, however, disrupted talks with the E.U., and the not close it,”said Chinese President Xi Jinping in a keynote
Trump administration has thus far resisted a far-reaching speech at the annual meeting of the World Economic
agreement that would encourage American firms to invest Forum in the Swiss ski resort of Davos in January 2017.
more abroad. Perhaps the greatest lesson coming out of In the coming five years, Xi added, China is expected to
China’s outward investment is the murkiness of corporate import $8 trillion of goods, attract $600 billion of foreign
structures of China’s private mega-firms and their links investment, and make 750 billion dollars of outbound
to the financial system. The key question is whether the investment, and Chinese tourists will make 700 million
authorities will move to more market-based solutions or overseas visits. “All this will create a bigger market, more
continue to rely on ad hoc state interventions (Yukon). capital, more products and more business opportunities
for other countries,” noted the President, whose country
Foreign Investment has contributed over 30 percent to global growth on
average every year since the 2008 international financial
Perhaps ironically, despite a still anemic world crisis (Xinhua).
economy charged with rising isolationist sentiment,
China’s cooperation with other countries keeps growing. 2017 began with promises of a new day in China
Data released in March 2017 showed that China became for foreign investment. The State Council’s executive
Germany’s largest trading partner in 2016. China- meeting late December 2016, chaired by Premier Li
82
1.5 Economic Reform
Background Germany trade amounted to $180.3 billion in 2016.
China overtook the United States as Germany’s top
Beijing encouraged an outward strategy trading partner. Beyond Germany, the broader Europe
for Chinese investment for several is also witnessing an increasingly active and fruitful
years, but the sharp decline in China’s foreign reserves cooperation with China. Trade between China and the
beginning in 2015 led the financial authorities to believe E.U. grew by 3 percent year on year to over $525 billion in
these investments had gotten out of control. The People’s 2016. Ruan Zongze, Vice President of the China Institute
Bank of China (PBOC), the country’s central bank, warned of International Studies, told Xinhua that against the
that some deals were putting China’s financial system at backdrop of a gloomy world economic growth, China’s
risk. The pressure to cut back has eased more recently as expressed a willingness to establish closer ties with the
capital flight diminished. A general perception was that the rest of the world. For example, China has established
bulk of China’s outward investment was going to the United railway connections with five of its 14 neighbors and the
States. That wasn’t really true. Only about 2 to 3 percent number is expected to increase. It has been the largest
of China’s outward investment over the past decade has source of outbound tourists since 2013, contributing
been going to the U.S.. Most of it landed on European more than 13 percent to global tourism revenues. A
shores. Economic factors partially explain Europe’s higher report from the United Nations Conference on Trade and
levels, but political sensitivities also play a role. For Chinese Development (UNCTAD) said that China received $139
companies, the E.U. also represented an easier market to billion of foreign direct investment in 2016, ranking third
penetrate because it offers a greater choice of partners. in the world just behind the United States and Britain.
Security concerns are also more contentious in the U.S.. Also in 2016, Beijing amended laws on foreign investment
China’s success in Europe may soon be slowing down. In and rolled out measures to further simplify approval
recent years, officials in the U.K., France, and Germany have procedures for foreign companies. China will continue
expressed concerns about Chinese acquisitions. The best to be one of the most alluring destinations for foreign
way to deal with these issues is bilateral investment treaties investment due to its fast growth and easier access, said
(BITs). Particularly important is liberalizing the negative James Zhan, a UNCTAD official in charge of investment
list for foreign investment, which is the focus of the BIT. and enterprise. “China will keep its door wide open and
Brexit, however, disrupted talks with the E.U., and the not close it,”said Chinese President Xi Jinping in a keynote
Trump administration has thus far resisted a far-reaching speech at the annual meeting of the World Economic
agreement that would encourage American firms to invest Forum in the Swiss ski resort of Davos in January 2017.
more abroad. Perhaps the greatest lesson coming out of In the coming five years, Xi added, China is expected to
China’s outward investment is the murkiness of corporate import $8 trillion of goods, attract $600 billion of foreign
structures of China’s private mega-firms and their links investment, and make 750 billion dollars of outbound
to the financial system. The key question is whether the investment, and Chinese tourists will make 700 million
authorities will move to more market-based solutions or overseas visits. “All this will create a bigger market, more
continue to rely on ad hoc state interventions (Yukon). capital, more products and more business opportunities
for other countries,” noted the President, whose country
Foreign Investment has contributed over 30 percent to global growth on
average every year since the 2008 international financial
Perhaps ironically, despite a still anemic world crisis (Xinhua).
economy charged with rising isolationist sentiment,
China’s cooperation with other countries keeps growing. 2017 began with promises of a new day in China
Data released in March 2017 showed that China became for foreign investment. The State Council’s executive
Germany’s largest trading partner in 2016. China- meeting late December 2016, chaired by Premier Li
82
