China to lift restrictions on foreign capital

New plan to encourage investors paves way for high-level opening-up

China rolled out a plan on Monday to stabilize foreign investment this year, signaling the country's determination to achieve high-level opening-up in the face of rising global protectionism, analysts said.

The plan, adopted at the State Council executive meeting chaired by Premier Li Qiang, outlined more practical and effective measures to both retain existing and attract new foreign investment because of the vital role that foreign-invested businesses play in terms of job creation, export stability and industrial upgrading.

China will fully implement its commitment to remove all market access restrictions for foreign investors in the manufacturing sector and expand the list of sectors encouraging foreign investment, according to the plan.

The country will encourage foreign enterprises to reinvest their capital within the Chinese market and participate more actively in equity investments. Meanwhile, steps will be taken toward optimizing the rules and regulations governing foreign mergers and acquisitions, as outlined in the plan.

Foreign enterprises will be treated on an equal footing with their Chinese counterparts in government procurement, according to the plan, which also put an emphasis on widening the financing options available to foreign-invested enterprises and strengthening intellectual property protection for them.

China will further open up its services sector, with a particular focus on accelerating pilot programs in key areas such as telecommunications, healthcare and education, said Li Yongjie, deputy international trade representative of the Ministry of Commerce, at a news conference in mid-January.

The country is committed to aligning itself with high-standard international trade and economic rules while building a network of high-level opening-up platforms such as free trade zones as it aims to enhance its overall business environment, Li said.

A total of 59,080 new foreign-invested firms were established across China last year, an increase of 9.9 percent year-on-year, data from the ministry showed.

These proactive opening-up policies stand in stark contrast with the intensifying investment restrictions tipped by certain economies, and have created a more welcoming and accessible environment for foreign enterprises — particularly small and medium-sized ones — looking to enter the Chinese market, said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.

While the global economy grapples with sluggish demand, the sheer size of China's consumer base, the nation's rising middle class and growing purchasing power have presented a crucial lifeline for foreign enterprises navigating broader economic uncertainties, Zhou added.