Tensions have escalated between the world’s two largest economies over the past few years.
Florence lo | Reuters
Beijing – China is working to boost foreign investment amid geopolitical tensions and corporate calls for more specific action.
On February 19, the authorities released the “Action Plan to Stabilize Foreign Investment in 2025” According to China’s CNBC Translation, foreign capital is easier to invest in domestic telecommunications and biotech industries.
The document requires clearer standards in government procurement – Main Problems with foreign companies In China – and plans to gradually allow foreign investment in the education and cultural sectors.
“We look forward to implementing it in a way that brings tangible benefits to our members,” Jens Eskelund, president of the European Union Chamber of Commerce in China, said in a statement Thursday.
The Chamber of Commerce pointed out that China has mentioned plans to open up telecommunications, healthcare, education and culture for foreign investment. The Chamber said the higher definition of public procurement requirements was “significantly positive”, noting that “if fully implemented”, it could benefit foreign companies that invest heavily in order to localize it.
China’s latest action plan was released around the same time 13.4% to RMB 97.59 billion (US$13.46 billion). According to official data obtained from wind direction information, this is the decline in FDI in 2024 by 27.1% in 2024 and 8% in 2023, according to wind direction information, which is the decline in annual growth rate for at least eight consecutive years.
The plan said all regions should “ensure that all measures are implemented by 2025 and effectively increase confidence in foreign investment.” The Business and National Development and Reform Commission (Economic Planning Bureau) jointly issued an action plan through the state legislature, the government executive body.
Officials from the Commerce Department stressed at a press conference on Thursday that the action plan will be implemented by the end of 2025 and details on subsequent support measures will be implemented soon.
“We thank the Chinese government for its recognition of the crucial role foreign companies play in the economy,” Michael Hart, president of the American Chamber of Commerce in China, said in a statement. “We look forward to further discussions on what our members are facing.” Key challenges and the steps required to ensure higher levels of market entry into the environment.”
The latest Amcham China survey of its members released last month found that the record share was Consider or have begun to diversify Manufacturing or purchasing from China. The survey last year found that members are discovering It’s hard to make money in China Better than the 19-19 pandemic.
Consumer spending in China has remained unremarkable since the pandemic, with retail sales only growing at lower unit numbers in recent months. Meanwhile, tensions with the United States escalate as the White House restricts China’s advanced technology on Chinese goods and restrictions on tariffs.
“Very strong signal”
While many aspects of the action plan were mentioned publicly last year, some key points, such as allowing foreign companies to use domestic loans to buy local equity shares, are relatively new, said Xiaojia Sun, a partner at Junhe Law Beijing.
She also highlighted the call from the plan, calling for support for foreign investors’ ability to participate in mergers and acquisitions in China, noting that it may benefit from overseas listings. Sun’s practice covers companies, mergers, acquisitions and capital markets.
The bigger problem remains China’s determination to take action on the plan.
“The action plan is a very strong signal,” said CNBC’s translation of Mandarin. She said she hopes Beijing will continue to implement it, noting that it releases a rare, compelling meeting similar to that of the Chinese president earlier in the week. Xi Jinping and entrepreneurs.
The February 17th party included Alibaba founder Jack Ma and Deepseek’s Liang Wenfeng. Regulatory crackdowns and uncertainties on future growth in recent years have weakened business confidence and sentiment among foreign investors.
Citi analysts pointed out earlier this month that China needs to strike a balance between tariff retaliation and stabilizing foreign direct investment.
“We believe that Chinese policymakers may be cautious about the goal of us (mnational corporations) as a form of retaliation against U.S. tariffs,” analysts said. “FDI enters China, bringing technology and know-how,” he said. , create jobs, income and profits, and contribute to tax revenue.”
In a relatively rare acknowledgement, Chinese Commerce Ministry officials pointed out on Thursday the impact of geopolitical tensions on foreign investment, including decisions by some companies to diversify from China. They also noted that foreign-invested companies contribute nearly 7% of employment and about 14% of taxes in the country.
Before, Official comments from the Ministry of Commerce Any decline in FDI can only be concerned with how most foreign companies remain optimistic about China’s long-term prospects.
