Moves necessary amid trade tensions with U.S., experts say
China announced specific new steps to improve the business environment for foreign investors, a necessary and effective move to attract international capital amid the escalating China-U.S. trade dispute, experts and foreign companies' executives said.
Following up on earlier pledges of further market opening for foreign investors, China said it will take steps to facilitate foreign projects and open more sectors to foreign investors, and it also vowed to continue its pace of opening-up.
At a press briefing on Thursday, Gao Feng, spokesperson for China's Ministry of Commerce (MOFCOM), said that the nation will gradually ease market access in the general manufacturing sector and continue to improve the investment environment for foreign capital in China.
"China will help foreign-funded enterprises tackle their problems such as the use of land and labor," Gao said.
Gao's comment followed an announcement from the State Council, China's cabinet, on Wednesday that listed an array of measures to help foreign companies, including granting land and maritime use rights to eligible foreign projects and opening more sectors to foreign investors.
Other measures such as enhancing the protection of intellectual property rights (IPR) will also be taken, according to a statement on Wednesday.
Dong Dengxin, director of Wuhan University of Science and Technology's Finance and Securities Institute, told the Global Times on Thursday that it's necessary for China to be more pro-active in opening the market amid rising global unilateralism and protectionism.
"Investment from the U.S. has been considered a major source of foreign capital in China in previous years, and it will remain so. Therefore, we did not exclude U.S. companies from the preferential policies. However, given the current situation, we have to resort to multiple sources of foreign investment, for example, from European countries, to prepare for a longstanding trade dispute with the U.S.," Dong added.
Michael Moore, CEO of U.S.-based company TechMatch, a matching platform for U.S. technology companies that want to do business in Asia, told the Global Times on Thursday that China is an attractive market for his company despite escalating trade tensions between the two countries, especially with the new measures.
He said that the IPR issue is the primary concern of his customers and his own company when thinking of cooperating with Chinese technology companies, but the Chinese government's reiteration of its stance has eased some of his concerns.
"My customers mainly connect with companies in Japan at the moment, but I'm consulting with several Chinese companies and trying to start here under the Chinese government's strong push and preferential policies for the technology industry," he said.
However, Dong noted that some of the support would only go to the companies with core technologies, and some plans might initially be used in pilot areas such as the free trade zone in South China's Hainan Province, but they won't be limited to those areas in the future.
For example, government support for foreign companies in sea-use approval procedures will initially go to companies with the ability to develop marine resources jointly with China, according to Dong.
"China is realizing its commitment of further opening-up in a quite active manner, and these efforts will surely pay off and attract more foreign companies," Dong added.
According to data from the MOFCOM, the number of new overseas-funded companies reached 41,331 in the first eight months of 2018, surging 102.7 percent year-on-year. Foreign direct investment (FDI) inflows grew 6.1 percent to $86.5 billion during the period.
"We'll invest more in China in the near future because China will be more consumer-oriented and consumer-driven," Tak Niinami, CEO of Tokyo-based consumer products company Suntory Holdings, told the Global Times in a recent interview.
Niinami further added that Suntory's business in China is being affected by the escalating trade tensions between China and the U.S., but that would probably only be for the short term.
"I think we can change our import sources to places such as Europe and Japan, and we can invest more in China to produce goods locally," Niinami said.