Recently, the State Council issued the Circular on Specific Measures for Promoting Foreign Investment Growth (the “Circular”) to deepen the structural reform on the supply side, streamline administration, delegate powers and optimize services to further enhance the rule of law, internationalization and convenience in foreign investment in China, to promote growth in and improve the quality of foreign investment. The Circular sets forth five aspects of policy measures for foreign investment growth.
First, there will be a further reduction in restrictions on foreign access, with a full implementation of before-entry national treatment and the negative list administration system so that the negative list that was piloted in the free trade zones may be implemented in the entire country as soon as possible. In addition, the scope of market access liberalization is further expanded to continue with the liberalization of special purpose vehicles and manufacture of vehicles using new energy sources, ship design, repair of regional and general use aircraft, international maritime transportation, railway passenger transportation, gas stations, Internet service locations, call centers, performance brokerage, banking, securities, insurance, etc.
Second, fiscal support policies are formulated. Foreign investors are encouraged to continuously expand their investment in China to actively bring about optimization of the trade structure and promote combining foreign investment with outbound investment. The establishment of regional headquarters by transnational companies, as well as a shift to the western parts of the country and the former industrial areas in the northeast are also encouraged to support a focused investment attraction infrastructure and the development of major projects.
Third is the improvement in the overall investment environment in national-level development areas. National-level development areas now have full authority to manage investments for support in the establishment of national-level development area projects and the expansion of investment attraction as well as the enhancement of customized services capabilities in national-level development areas.
Fourth, professionals may now enter and exit China more conveniently to better attract high-level experts. The use of “notification plus commitment” and “handling of openings” schemes allow foreign professionals to more conveniently obtain work permits. The Implementation on Foreign Talent Visas promulgated in the second half of 2017 improves the evaluation standard for foreign professionals and expands the issuance scope of foreign professional visas.
Fifth, the business operating environment is optimized. Close attention is paid to improving the legal system for foreign investment, raising the level of service for foreign investment, guaranteeing the free repatriation of profits, deepening the sharing of commercial information and business contracts between foreign-invested enterprises, encouraging foreign investors to participate in the optimization and reorganization of domestic enterprises, improving the protection of the intellectual property rights of foreign-invested enterprises, enhancing the international competitiveness of research and development, and maintaining the stability and continuity of foreign investment policies.
The Circular requires all regions and departments to pay great attention to the use of foreign investment under the new circumstances, divide their work based on their responsibilities, act proactively and collaborate seamlessly. The Ministry of Commerce will meet with the relevant departments for closer supervision to ensure a thorough implementation of the policies.