He Chinese State Council (Executive) published in the last hours guidelines to “further optimize the foreign investment environment” and “intensify efforts to attract foreign investment”, at a time when the post-pandemic recovery of the Chinese economy seems to have slowed down.
The guidelines call for “improving the general balance between the national and international situation” and “promoting a world-class business environment that is market-oriented, law-based and internationalized,” reads a statement from the Executive published last night on its website .
The Executive asks “to make the most of the advantages of the huge Chinese market” and “to make more efforts to attract and use foreign investment and to do so more effectively.”
The State Council cites “guaranteeing national treatment to foreign-invested enterprises,” “strengthening their protection,” and “providing fiscal and tax support” as some of the areas where efforts are needed.
Reducing the sectors or activities banned or restricted to foreign investment has been one of the battlefields of foreign companies present in China in recent years, especially European and American ones.
China: slow economic recovery
Those companies, together with their governments or EU institutions, have complained to Beijing about the lack of reciprocity in companies’ access to their respective markets, given that Chinese firms enjoy subsidies and much more freedom to operate, invest or buy entities their territories.
After a promising start to the year, the post-pandemic recovery of the Chinese economy shows signs of slowing down, growing less than expected in the second quarter (+6.3% year-on-year).
Low national and international demand, deflation risks and insufficient stimuli, together with a real estate crisis that has not bottomed out and a lack of confidence in the private sector are the main causes that analysts put forward to explain what is happening in the second largest World economy.
In addition, in recent months, the reform of the Anti-espionage Law, which includes “collaboration with spy organizations and their agents” in the category of espionage, and the investigations launched against foreign consultancies in China have sown concern in the sector and in potential foreign investors.
Source: Larepublica
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