China to Further Improve Business Environment and Create Greater Opportunities for Foreign Investors
(October 5, 2023)
Distinguished Chairman Vandeputte,
Friends from Belgian Business Community,
Good evening. It is my great pleasure to attend this event organized by Flanders-China Chamber of Commerce (FCCC). I am happy to communicate face-to-face and share with you China's latest policy on attracting and utilizing foreign investment.
Opening-up is China’s fundamental national policy. China stays unequivocally committed to all-round opening-up. President Xi Jinping has stressed on different occasions that China will not change its policy of utilizing foreign investment and protecting the legitimate rights and interests of foreign invested companies in China. Nor will China change its policy direction of providing better services for foreign companies to invest in China. In recent years, the Chinese government has stepped up opening-up and launched a series of policy measures to open its door wider and to actively utilize foreign investment. In this August, the Chinese government issued the Guidelines on Further Optimizing Foreign Investment Environment and Attracting Foreign Investment. Twenty-four measures in six aspects will be rolled out to further improve China’s foreign investment environment. Let me share with you the main points in five major aspects of the Guidelines.
First, improve the quality of foreign investment. According to the document, foreign-invested companies are encouraged to establish research and development centers, investment companies and regional headquarters in China. They are also encouraged to invest in biopharmaceuticals, vocational education and training sectors. The service sector will be opened up wider.
Let me just say a few more words given the unique features of the Belgian economy. According to the Guidelines, about R&D centers, support will be given to joint R&D and commercial application programs by foreign-invested R&D centers and Chinese companies and foreign-invested companies and its R&D centers in China will be encouraged to undertake China’s major science and technology research projects. In the biopharmaceutical sector, foreign-invested companies are encouraged to conduct clinical trials of cell and gene therapy drugs which have already been marketed overseas in a law-based manner. Drugs registration application procedure is to be streamlined for those already approved overseas and its production shifted to China.
Second, ensure national treatment for foreign-invested companies. Efforts will be made to ensure foreign-invested companies are entitled to participate in government procurement activities. The specific standards of “produced within China” will be further clarified. Foreign-invested companies are supported to develop world-leading innovative products in China. Special inspections against differential or discriminatory treatment of foreign-invested companies will be carried out. Foreign companies can equally participate in the industrial standard-setting. The entire process of standard formulation and revision will be more transparent. Foreign-invested companies are encouraged to develop corporate standards on their own or with other companies. Standardized services will be provided. Foreign-invested companies are equally eligible to supporting policies adopted in China.
Third, continue to strengthen protection of rights and interests of foreign-invested companies. The Guidelines laid out specific and clear measures in terms of strengthening administrative protection of intellectual property rights, enhancing administrative law enforcement of intellectual property rights, and standardizing the formulation of foreign-related economic and trade policies and regulations.
Fourth, further facilitate investment and business operation. According to the Guidelines, senior managers, technical personnel and their families will enjoy facilitation in their border entry-exit, stay and application for permanent residence in China. Green channels for eligible foreign-invested companies will be put in place. Foreign-invested companies with low credit risks will be subject to fewer and less frequent law enforcement inspections.
Fifth, provide greater financial support and tax incentives for foreign-invested companies. The Guidelines noted that the comprehensive fiscal and taxation support policies like financial support, tax incentives and rewards for eligible foreign-invested companies will be further improved. To be more specific, greater support will be given to landmark foreign-invested projects. The policy of temporarily exempting withholding income tax on profits reinvested in China by foreign-invested companies will be implemented.
The Guidelines put forward a number of groundbreaking opening-up measures in response to the major concerns of foreign-invested companies on investment and operation in China. It serves as an icon policy document of China’s commitment to high-level opening-up and welcoming foreign investment. I believe that all of you can feel China’s firm determination of opening its door wider to the world. I also hope you may fully benefit from the implementation of these measures.
Ladies and Gentlemen,
As the world’s second largest economy, China’s economic development has always attracted wide attention. There has been a lot of discussion about China’s economy, some of which are pessimistic. Some believe that China’s economy has stepped in a downward range and China is now less attractive to foreign investors. I want to tell you that China’s economy enjoys strong resilience, tremendous potential and great vitality, and the fundamentals sustaining its long-term growth stay unchanged. Faced with challenges of losing steam of world economic recovery and the overlapping of domestic cyclical structural contradictions, China has introduced a string of macro policies across the board. With these policies falling in place, China’s economic performance in August continued to recover. Major economic indicators have shown signs of improvement and positive factors have accumulated. In September, the Purchasing Managers’ Index (PMI) reached 50.2 percent, passing the important 50-percent mark, increasing by 0.5 percentage points from August and returning to the expansion range. The Non-manufacturing Business Activity Index grew to 51.7 percent. The average price of new residential buildings in 100 cities across China increased by 0.05 percent month-on-month. The following numbers show that foreign investors are optimistic about China and about investing in China. From January to August 2023, the number of newly established foreign-invested companies in China increased by 33 percent year-on-year. Paid-in foreign capital in high-tech manufacturing sector increased by 19.7 percent despite the mild decrease of overall paid-in foreign investment. In the high-tech service sector, paid-in foreign capital in R&D and design service increased by 57.1 percent, meaning that the quality of foreign investment has further improved. In the first eight months of this year, investment from the United Kingdom, Canada, France, Switzerland, the Netherlands, and Germany increased by 132.6 percent, 111.2 percent, 105.6 percent, 59.2 percent, 25.3 percent and 20.8 percent respectively. If we talk about Belgium, from January to July, investment flow from Belgium to China recorded a robust growth, an increase of 48.2 percent year-on-year. Therefore, I hope that Belgian entrepreneurs will not be misled by some pessimistic media reports, but maintain confidence in China’s economic development. The economic data of a certain month or several months cannot represent the overall trend of China’s economy. Short-term fluctuations cannot change long-term growth momentum of China’s economy.
To accelerate economic recovery is one of the most urgent challenges faced by our world. In the context of turmoil and transformation, the world calls for entrepreneurship based on openness, cooperation and innovation. I believe entrepreneurship is key to global economic recovery and growth, and every country’s socioeconomic development is impossible without the important contribution of entrepreneurs. However, in recent years, intensified geopolitical changes and de-globalization trend have squeezed the space for entrepreneurship. The politicization of economic activities and overstretched concept of national security have even harmed entrepreneurs. We live in a global community of interdependence. Countries need to pursue mutual support and win-win cooperation, rather than high fences around small yards or zero-sum games. China has always been working towards building a global community of shared future. On September 26, China released the white paper A Global Community of Shared Future: China’s Proposals and Actions, promoting a new type of economic globalization and putting forward China’s proposals for better global governance and response to various challenges in the 21st century. China cannot develop by shutting itself from the world, nor can the world develop by shutting out China. As Belgian entrepreneurs have always participated in China’s economic development. I want to extend my warm welcome to all of you to visit China more often to seek more cooperation opportunities. The Chinese Embassy in Belgium will continue to provide necessary support and facilitation.