China attaches great importance to foreign investment to achieve its economic growth and development goals. Foreign investment contributes to the economy in the form of capital, cooperation and technology. The country is developing good relations with investors. China, which is growing in all areas, has established a series of policies aimed at attracting foreign investors to ensure a steady increase in economic development. The goal is to strengthen economic development through foreign investment.
By proclaiming 2023 as the “Year of Investment,” China aims to increase foreign investment in the long term through new policies. In this regard, in recent years, China has strengthened its relationship with foreign business organizations by creating a market-oriented, legal and international business environment.
Under the leadership of President Xi Jinping, a document was prepared on July 25, 2023, to achieve foreign investment. The goal was to make foreign investment important in the country and make future investment seem attractive. On August 13, 2023, China’s State Council and Cabinet issued a 24-point declaration, setting out 6 key ways to ensure the steady progress of the country’s economy. The document aims to take advantage of the country’s market, create an international environment, and attract high-quality foreign investment.[1]
The aim of the newly established policies is to encourage foreign investment in all regions, institutions and departments of the country, create a more favorable environment for investors, ensure coordination between regions and strengthen confidence. It was also agreed that the interests of foreign investors would be treated equally. The country, which expects investors in various fields with each article, is taking important steps to provide all kinds of facilities.
Foreign investors are allowed to set up research and development centers in China and are encouraged to carry out large scientific research projects. Especially projects in the biomedical field will be implemented quickly. In addition, foreign companies are allowed by law to fully participate in government procurement activities. Foreign-invested enterprises that invest in state-supported sectors will be given priority.
The 6 main paths are: National Treatment of Foreign Enterprises, Improving the Quality of Their Investment, Protection of Foreign Investment, Ease of Doing Business, Tax and Financial Support, and Investment Encouraging Factors. In addition, investors are temporarily exempted from withholding tax. This is to ensure foreign investment incentives.
Improving cross-border data flow and security is also an important issue. It is expected that cybersecurity and personal information protection will be rigorously implemented. To this end, foreign-invested abroad should benefit from secure data flow services. It has been agreed to test pilot applications to enhance security in strategic locations such as Beijing, Tianjin, Shanghai, Guangdong-Hong Kong-Macao Greater Bay Area.
According to official data, 23,536 new foreign enterprises were established in China in the first half of 2023, an annual increase of 35.7%.[2] From this, it can be seen that China is constantly receiving foreign investment and occupies an important position in this field.
China is taking decisive steps to attract foreign investment by creating a favorable business environment. China’s attempts to reverse the situation that has led to a decline in foreign investment in the country will be seen in the coming processes. In this way, an increase in foreign investment will be observed.
China has a complete industrial chain with more than 220 industrial products, making it the world leader in manufacturing. Pang Ming, chief economist of global consulting firm JLL China, said that the country’s goal is to attract foreign investment in various sectors with strong policy support and that China is in an important geographical position.[3]
A transparent policy toward foreign companies is implemented. By standardizing foreign economic and trade policies, future problems should be identified much earlier. Business ideas and procedures will be considered in accordance with the laws of the country and help create new policies. This will ensure a fairer process and a solid foundation for international trade relations.
The government will update its residency policies to facilitate the smooth entry and exit of foreign workers, accommodation, visas and residence. Embassies and consulates will provide assistance in applying for visas for executives of multinational companies. It will also includes issues such as employee safety, medical care and the provision of financial services. Another point of the declaration is to facilitate the entry, exit and stay of executives, technical personnel and their families.
[1]“China State Council Issues Guidelines in Bid to Increase Foreign Investment”, Reuters,https://www.reuters.com/markets/asia/china-state-council-says-it-issues-guidelines-optimise-foreign-investment-2023-08-13/,(Date of Accession:15.08.2023).
[2]“Update: China to Promote, Strengthen Policy Support for Inbound Investment”, English news, https://english.news.cn/20230815/a25a94af04314318b49a7de26122d5c9/c.html,(Date of Accession: 15.08.2023).
[3]“Guidelines Unveiled to Draw More Foreign Investment”, China Daily, https://www.chinadaily.com.cn/a/202308/14/WS64d95ab6a31035260b81bdb0.html,
(Date of Accesion:15.08.2023)
