Page 50 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
housing costs and elderly care. Other measures include Opening up the automobile sector to foreign firms
lower VAT and tariffs. Authorities are approving more put an end to a “protection period” for domestic brands,
infrastructure projects, which should mitigate the said Dong Yang, vice-director of the China Association
slowdown in fixed asset investment. Based on these of Automobile Manufacturers. “Instead of having huge
policies, it is reasonable to expect the economy to impact on domestic automakers, wider opening up
stabilize and then accelerate in mid-2019 (Mowat). will be conducive to encouraging competition and
pushing the industry to raise quality and efficiency,”
Chinese President Xi Jinping promised non-stop Dong said. The consistent widening of opening up in
effort in reform and opening up and commitment to an China’s manufacturing sector should not only help
open economy. “We are optimistic about the prospect domestic industrial upgrading but also benefit all
of China’s economy,” said Xi, pledging extraordinary foreign companies. Among 609 sub-categories of the
efforts to shift China’s economy in the new era from manufacturing sector, 96.1 percent are now completely
high-speed growth to high-quality development, from open to foreign investment, according to the Ministry
an expansion in quantity to improvement in quality, of Industry and Information Technology (MIIT ). In
and from the criterion of “have-or-have-not” to one of 2017, the manufacturing sector attracted total foreign
“good-or-bad”. The president encouraged countries direct investment of US$33.5 billion, while outbound
around the world “to board the express train of China’s investment by domestic companies in the sector totaled
economy” and share benefits from its reform, opening US$120.1 billion. The MIIT data also showed that 4,986
up and development. “China will foster a more relaxed foreign-invested manufacturing firms were set up in
and orderly environment for entrepreneurs from home 2017, up 24.3 percent year-on-year. The main fields
and abroad to make investment and start business,” said of foreign investment covered computers, integrated
Xi, calling on entrepreneurs to seek better development circuits, smart manufacturing and other high-tech
amid China’s new journey of reform and opening up sectors. The sector’s open attitude towards foreign
(Xinhua, Xi Vows). investment “not only raised the country’s own strength,
but also provided handsome returns for foreign
China also promised in April 2018 to create a more companies and institutions,” Huang said. MIIT chief
open business environment for foreign companies engineer Chen Yin said the ministry has been working
and treat domestic and foreign investors equally— with other departments on reducing automobile import
one step at a time. The government pledged to allow tariffs “by a considerable amount,” and would make the
foreign companies to compete on equal footing cuts public as soon as possible. Industrial development
with domestic counterparts in business registration, depends hugely on global economic integration. The
government procurement and participation in the Chinese manufacturing sector will further expand
nation’s strategic development plans, such as the Made opening up to stimulate the innovation of advanced
in China 2025 strategy. Yan Pengcheng, spokesman of technology, realize compliance with international
the National Development and Reform Commission, economic and trade rules, and offer more and better
said the government will roll out concrete road maps investment opportunities to foreign firms. According to
and timetables for sectors that will be further opened MIIT Miao Wei, a pattern of all-round opening up of the
up over the next few years. In the near future, China will manufacturing sector has come into being.
issue measures and take major steps toward opening
its financial market and new energy, infrastructure It is likely that regional governments will develop
construction, transportation and service sectors. The their own incentive packages to attract and facilitate
government will also quicken the drafting of laws to foreign investment, tailored to their economies
improve regulation of foreign investment and protect and available resources. For example, in late 2018
investor rights, Yan added. His comments come one Guangdong province announced cash rewards of up
day after the commission announced a timeline for to 100 million yuan (US$14.56 million) for qualified
removing ownership limits for foreign companies in the investment projects and accelerated the market
auto industry. China removed foreign ownership caps opening of previously restricted industries, among other
for companies making electric cars in 2018, and caps investment incentives (Koty). Also, foreign investors will
for joint ventures producing commercial cars will be be allowed to establish solely foreign-owned enterprises
removed in 2020. The plan also calls for phasing out the in a number of key industries in Guangdong. The
equity cap on automotive joint ventures by 2022 (Wang). industries include manufacturing of special-purpose
50
housing costs and elderly care. Other measures include Opening up the automobile sector to foreign firms
lower VAT and tariffs. Authorities are approving more put an end to a “protection period” for domestic brands,
infrastructure projects, which should mitigate the said Dong Yang, vice-director of the China Association
slowdown in fixed asset investment. Based on these of Automobile Manufacturers. “Instead of having huge
policies, it is reasonable to expect the economy to impact on domestic automakers, wider opening up
stabilize and then accelerate in mid-2019 (Mowat). will be conducive to encouraging competition and
pushing the industry to raise quality and efficiency,”
Chinese President Xi Jinping promised non-stop Dong said. The consistent widening of opening up in
effort in reform and opening up and commitment to an China’s manufacturing sector should not only help
open economy. “We are optimistic about the prospect domestic industrial upgrading but also benefit all
of China’s economy,” said Xi, pledging extraordinary foreign companies. Among 609 sub-categories of the
efforts to shift China’s economy in the new era from manufacturing sector, 96.1 percent are now completely
high-speed growth to high-quality development, from open to foreign investment, according to the Ministry
an expansion in quantity to improvement in quality, of Industry and Information Technology (MIIT ). In
and from the criterion of “have-or-have-not” to one of 2017, the manufacturing sector attracted total foreign
“good-or-bad”. The president encouraged countries direct investment of US$33.5 billion, while outbound
around the world “to board the express train of China’s investment by domestic companies in the sector totaled
economy” and share benefits from its reform, opening US$120.1 billion. The MIIT data also showed that 4,986
up and development. “China will foster a more relaxed foreign-invested manufacturing firms were set up in
and orderly environment for entrepreneurs from home 2017, up 24.3 percent year-on-year. The main fields
and abroad to make investment and start business,” said of foreign investment covered computers, integrated
Xi, calling on entrepreneurs to seek better development circuits, smart manufacturing and other high-tech
amid China’s new journey of reform and opening up sectors. The sector’s open attitude towards foreign
(Xinhua, Xi Vows). investment “not only raised the country’s own strength,
but also provided handsome returns for foreign
China also promised in April 2018 to create a more companies and institutions,” Huang said. MIIT chief
open business environment for foreign companies engineer Chen Yin said the ministry has been working
and treat domestic and foreign investors equally— with other departments on reducing automobile import
one step at a time. The government pledged to allow tariffs “by a considerable amount,” and would make the
foreign companies to compete on equal footing cuts public as soon as possible. Industrial development
with domestic counterparts in business registration, depends hugely on global economic integration. The
government procurement and participation in the Chinese manufacturing sector will further expand
nation’s strategic development plans, such as the Made opening up to stimulate the innovation of advanced
in China 2025 strategy. Yan Pengcheng, spokesman of technology, realize compliance with international
the National Development and Reform Commission, economic and trade rules, and offer more and better
said the government will roll out concrete road maps investment opportunities to foreign firms. According to
and timetables for sectors that will be further opened MIIT Miao Wei, a pattern of all-round opening up of the
up over the next few years. In the near future, China will manufacturing sector has come into being.
issue measures and take major steps toward opening
its financial market and new energy, infrastructure It is likely that regional governments will develop
construction, transportation and service sectors. The their own incentive packages to attract and facilitate
government will also quicken the drafting of laws to foreign investment, tailored to their economies
improve regulation of foreign investment and protect and available resources. For example, in late 2018
investor rights, Yan added. His comments come one Guangdong province announced cash rewards of up
day after the commission announced a timeline for to 100 million yuan (US$14.56 million) for qualified
removing ownership limits for foreign companies in the investment projects and accelerated the market
auto industry. China removed foreign ownership caps opening of previously restricted industries, among other
for companies making electric cars in 2018, and caps investment incentives (Koty). Also, foreign investors will
for joint ventures producing commercial cars will be be allowed to establish solely foreign-owned enterprises
removed in 2020. The plan also calls for phasing out the in a number of key industries in Guangdong. The
equity cap on automotive joint ventures by 2022 (Wang). industries include manufacturing of special-purpose
50
