On Tuesday, October 25th, China’s primary economic planner, the National Development and Reform Commission (NDRC), along with five other ministries, published 15 measures to facilitate the implementation of foreign-invested projects, with a focus on the manufacturing and high-tech industries.
According to the Ministry of Commerce, China’s utilization of foreign direct investment increased 16.4 percent year on year to 892.7 billion yuan ($122 billion) in the first eight months of this year. Specifically, FDI in high-tech manufacturing increased by 43.1 percent over the same time last year. Foreign capital in high-tech sectors climbed by 33.6 percent year on year, and in the eastern, central, and western regions, it increased by 14.3 percent, 27.6 percent, and 43 percent, respectively.
The measures aim to increase and attract foreign capital inflows, enhance capital utilization quality, and support the growth of the manufacturing industry while strengthening its integration into the global industrial chain.
▲ Published on October 25th on the official website of the National Development and Reform Commission
Sapience Pro prepared a summary of the 15th new measures for your convenience.
|Tangible Projects. Implement the Foreign Investment Law, ensure that new opening-up measures are implemented promptly, and convert opening-up policies into tangible foreign investment projects as soon as possible.
|Equal Access. Adhere to the principle that foreign investment should be treated equally by law – ensure that foreign-invested enterprises enjoy equal access to national industrial development and regional development support policies under rules and regulations, and ensure that foreign-invested enterprises enjoy equal treatment in terms of factor acquisition, qualification licensing, business operation, intellectual property protection, standard setting, bidding, and government procurement.
|Better Service & Support. The government will increase support for critical foreign-funded projects and strengthen land use, environmental protection, logistics, personnel entry and exit, and service guarantee. The government will promote the signing and implementation of foreign-funded projects, play the leading role in major foreign-funded projects, and provide policy support for project land use, environmental impact assessment, planning, and energy consumption.
|Strengthen Land Protection. Support land allocation to projects with rapid construction, sound development, and high unit output, and guide foreign investors in the manufacturing industry to invest in projects that meet reasonable requirements.
|Investment Promotion Events. Encourage various international industrial investment cooperation activities, as well as communication and interaction with foreign-invested firms, relevant chambers of commerce, and international organizations such as the World Economic Forum. Create a platform for multinational corporations to invest and attract investment from diverse localities, facilitate detailed docking and clear communication between international firms and local governments, and encourage project signing and execution.
|Exhibitions & Trade Fairs. Organize significant exhibitions such as the China International Investment and Trade Fair and the Central China Investment and Trade Expo, strengthen the investment promotion service function of the trade fairs, increase the invitation of multinational companies, and hold investment promotion activities such as investment promotion for key industrial chains such as medical, semiconductor, chemical energy and others.
|“Fast Track” for Foreign Executives. Simplify the entry & exit of senior executives, technical workers, and their families of multinational corporations and foreign-invested firms based on Covid-19 prevention and control. Make it easier for foreign personnel to visit China.
|Supply Chain Support. Allow the State Council’s leading group to play its full role in ensuring the smooth flow of logistics, strengthening departmental coordination and the link between ministries and provinces, efficiently coordinating epidemic prevention and control and ensuring the smooth flow of work, and promoting the safety and stability of the industrial chain and supply chain.
|Financial Incentives. Support qualified foreign-invested enterprises to raise funds by listing on the Main Board, the Science and Technology Innovation Board, the ChiNext Board, and the Beijing Stock Exchange. Support financial institutions to innovate products and services under compliance with laws and regulations and controllable risks, and provide high-quality financial services and financing support to qualified foreign-invested enterprises following marketization.
|Tax & Reinvestment Incentives. Encourage foreign-invested enterprises to reinvest their profits. Implement policies such as the temporary waiver of withholding income tax on foreign investors’ direct investment with distributed profits, further optimize the handling process, and improve the convenience for enterprises to enjoy the policy. Local governments are encouraged to give foreign-invested enterprises the same supporting policies to reinvest profits for newly increased foreign investment and to strengthen the guarantee of factors such as land and energy.
|Import & Export Support. For manufacturing enterprises, Implement the Regional Comprehensive Economic Partnership Agreement (RCEP) in a high-quality manner, encourage local governments to build public service platforms, and step up publicity and training on RCEP rules for manufacturing enterprises with foreign investment, to guide enterprises to be familiar with and master the market opening regulations and commitments, explore market opportunities.
|Investment Guidance. Foreign investment in advanced manufacturing and high and new technology will be primarily supported in sectors such as high-end equipment, essential components, and critical components, in accordance with the criteria of the 14th five-year plan. The modern service business welcomes foreign investment in R&D, design, contemporary logistics, and other disciplines. Foreign investment in new energy, green, and low-carbon key technology invention and demonstration application is encouraged in energy conservation and environmental protection.
|R&D Support. Encourage foreign-invested firms to establish R&D design centers and an industrial chain community. Encourage foreign capital to utilize its capital and technological advantages, actively engage in intelligent manufacturing and construct smart manufacturing factories.
|Green & Low-Carbon Manufacturing. Support foreign-invested enterprises to participate equally in formulating and revising relevant standards in the green and low-carbon field and scientifically determining the energy efficiency and energy consumption quota requirements for critical national products. Support foreign-invested enterprises to participate in the research and development, promotion, and application of green and low-carbon technologies, and encourage foreign-invested enterprises to be “leaders” in energy efficiency and water efficiency.
|Encourage Business Tours. Coordination and organization of activities such as “local tours of multinational companies,” with a focus on promoting the invitation of multinational companies in the manufacturing field to prioritize the development of the central, western, and northeastern regions with a more robust industrial development foundation. Continue to support national-level new zones and development zones in the significant, western and northeastern areas, as well as undertaking industrial transfer demonstration zones, key undertaking sites for gradient transfer of processing trade, and national processing trade industrial parks to better play a leading role in attracting investment from the manufacturing industry and undertake international and domestic industrial transfers.
These policies are being implemented as investment becomes more critical in China’s efforts to deal with the complicated investment climate created by the prolonged COVID-19 outbreak and falling demand from international markets.
According to data released Monday, investment contributed 26.7 percent of China’s economic growth in the first three quarters of 2022.
Several domestic airlines have recently announced the reinstatement and expansion of overseas services during the winter and spring seasons.
FDI forecasts remain optimistic with these favorable policies’ implementation, the Chinese economy’s continued recovery, and further rationalization of the country’s actions to combat the pandemic.
Company: Sapience Pro
Author: Chyngyz Sher, Bryan Zhang