Page 10 - THE SOUTH CHINA BUSINESS JOURNAL
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A greater role for the market since 2013 nationwide to simplify trade inspections, declarations,
taxes, and other procedures. It partly explains why
Since the 2013 Third Plenum, the market has been China moved from 78th in 2017 to 48th in 2018 in the
given a more decisive role in some areas. World Bank’s “Ease of Doing Business” rankings.
For instance, foreign direct investment (FDI) Further to the above, there are signs that Beijing
restrictions have been eased due to China moving is willing to implement tough yet necessary reforms
from an approval-based system to a negative list- to sustain China’s economy in the long-run. For
based system. example, the government has shown restraint with
its monetary policy which has reduced financial risks
This new system allows most inbound FDI to proceed through deleveraging.
without a government review, except in those areas that
are on the negative list. Over time, the scope of this This difficult decision is one of the reasons why
negative list has also been reduced. China’s economy is slowing down, but Beijing seems
willing to accept this as long as the economy does not
FDI is important to China’s development because experience a “hard landing”.
it plays a key role in driving higher value-added
industrial output. For example, in 2016, foreign funded To ensure that a “hard landing” does not happen,
businesses accounted for 77 percent of China’s total Beijing has been more active with implementing fiscal
high-tech exports. policy in place of wide-ranging stimulus measures.
Restrictions on FDI have been eased even further for At the annual “Two Sessions” meetings in March, for
firms investing in free trade zones (FTZs). FTZs were example, Premier Li Keqiang announced US$298 billion
first launched in 2013 and continue in the spirit of in tax cuts for businesses.
Deng’s gradualism and experimentalism by allowing
reform policies to be tested before some of them are The state reasserting control since 2013
rolled out on a national scale.
Even though there has been progress in some areas
Trade facilitation reforms, which China since 2013, in other areas it appears the state is trying to
prioritized by ratifying the WTO Trade reassert control at the expense of the market. There are
Facilitation Agreement in 2015, were therefore questions surrounding Beijing’s commitment
implemented in such a way. to market-based reforms.
These reforms have led to There is even speculation that Beijing is content with
the implementation the current mix between the state and market, and
of a “single rather than focus on further reforms, it is more focused
window” on exporting the ‘China Model’ through policies, such
system as the Belt and Road Initiative (BRI).
The Winter 2019 edition of ‘The China Dashboard’,
which tracks the reform goals decided at the 2013 Third
Plenum, shows reforms are not moving forward
in eight out of 10 areas.
7 AmCham South China
A greater role for the market since 2013 nationwide to simplify trade inspections, declarations,
taxes, and other procedures. It partly explains why
Since the 2013 Third Plenum, the market has been China moved from 78th in 2017 to 48th in 2018 in the
given a more decisive role in some areas. World Bank’s “Ease of Doing Business” rankings.
For instance, foreign direct investment (FDI) Further to the above, there are signs that Beijing
restrictions have been eased due to China moving is willing to implement tough yet necessary reforms
from an approval-based system to a negative list- to sustain China’s economy in the long-run. For
based system. example, the government has shown restraint with
its monetary policy which has reduced financial risks
This new system allows most inbound FDI to proceed through deleveraging.
without a government review, except in those areas that
are on the negative list. Over time, the scope of this This difficult decision is one of the reasons why
negative list has also been reduced. China’s economy is slowing down, but Beijing seems
willing to accept this as long as the economy does not
FDI is important to China’s development because experience a “hard landing”.
it plays a key role in driving higher value-added
industrial output. For example, in 2016, foreign funded To ensure that a “hard landing” does not happen,
businesses accounted for 77 percent of China’s total Beijing has been more active with implementing fiscal
high-tech exports. policy in place of wide-ranging stimulus measures.
Restrictions on FDI have been eased even further for At the annual “Two Sessions” meetings in March, for
firms investing in free trade zones (FTZs). FTZs were example, Premier Li Keqiang announced US$298 billion
first launched in 2013 and continue in the spirit of in tax cuts for businesses.
Deng’s gradualism and experimentalism by allowing
reform policies to be tested before some of them are The state reasserting control since 2013
rolled out on a national scale.
Even though there has been progress in some areas
Trade facilitation reforms, which China since 2013, in other areas it appears the state is trying to
prioritized by ratifying the WTO Trade reassert control at the expense of the market. There are
Facilitation Agreement in 2015, were therefore questions surrounding Beijing’s commitment
implemented in such a way. to market-based reforms.
These reforms have led to There is even speculation that Beijing is content with
the implementation the current mix between the state and market, and
of a “single rather than focus on further reforms, it is more focused
window” on exporting the ‘China Model’ through policies, such
system as the Belt and Road Initiative (BRI).
The Winter 2019 edition of ‘The China Dashboard’,
which tracks the reform goals decided at the 2013 Third
Plenum, shows reforms are not moving forward
in eight out of 10 areas.
7 AmCham South China
