Foreign investment law guarantee for rising FDI in China: official

04 Mar '21

2 min read

Pic: Shutterstock

China’s foreign investment law has created a more market-oriented investment environment for foreign investors and enterprises, and has been acting as a guarantee for an increase of 4.5 per cent of foreign direct investment (FDI) to the country last year, according to Zang Tiewei, a spokesperson for the Legislative Affairs Commission of the National People’s Congress Standing Committee.

Data shows the scale of foreign investment and the global share reached a record high, making China the world's largest destination for foreign capital, according to a top Chinese newspaper.

The result comes against the challenge of global epidemic and the law has shown Chinese government's determination on opening-up policy, Zang said.

FDI in China in 2020 increased by 6.2 per cent year on year (YoY) to reach a record high of 999.98 billion yuan, equivalent to $144, 37 billion and an increase of 4.5 percent YoY in US dollar terms, the ministry of commerce announced earlier.

Actual foreign investment in Chinese service industry expanded by 13.9 per cent YoY with 77.677 billion yuan and took 77.7 per cent of all FDI.

As part of the law, foreign-invested enterprises will be granted access to government procurement markets through fair competition. The law also bans using administrative licensing and penalties to force foreign investors and firms to transfer technology.

Foreign companies are entitled to equal participation as their domestically-invested peers in the formulation and revision of national, industrial and local standards in accordance with the law. They can make standards-related recommendations and undertake such work as setting standards.

The ministry recently released 22 measures to expand high-level opening-up, including technology and talent from global markets, to reinforce China's strengths in attracting foreign investment.

The ministry said it will promote the integration of international and domestic industry chains, and relax the requirements for foreign investors' strategic investment in listed companies, including such areas as qualification requirements, shareholding ratios, and shareholding lock-up periods.

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