China unveils measures to facilitate foreign investment

China has released an action plan aimed at stabilizing and improving the utilization of foreign investment. The plan outlines 15 measures, including initiatives to expand market access, facilitate investment, support R&D, and ensure fair access to business support policies.

Wider market access

China will steadily expand pilot opening-up programs for vocational skills training institutions, vocational colleges, and higher education institutions specializing in science, engineering, agriculture, and medicine.

In the financial sector, the plan supports broader use of risk management tools by foreign institutions. It also encourages such institutions to provide fund investment advisory services in accordance with the law and will grant cross-border financing facilitation quotas to key foreign-invested companies.

The country will also study expanding pilot areas that allow foreign investment in biotechnology and wholly foreign-owned hospitals.

Easier investment and reinvestment

Rules governing foreign investors' mergers and acquisitions of domestic companies will be revised to streamline procedures and payment requirements.

Free trade zones and pilot cities for expanded opening-up in the service sector will be encouraged to explore scenario-based and sector-specific negative lists for outbound data transfers across a wide range of industries.

The plan also calls for implementing tax incentives for overseas investors that directly reinvest distributed profits in China. In addition, more reinvestment projects will be included on national lists of major and key foreign investment projects.

Greater support for R&D

Support policies for foreign-funded R&D centers will be enhanced to facilitate the recruitment of high-level international professionals, support the establishment of open innovation platforms and training bases, foster new types of research institutions, and promote the commercialization of scientific and technological achievements.

Eligible centers will also enjoy tax incentives for imported research equipment and supplies in accordance with the law.

Fair access to business support

Business support policies will be applied equally to domestic and foreign-invested enterprises, except where otherwise stipulated by laws and regulations or where national security considerations apply.

The plan also calls for stronger fair competition reviews in government procurement and bidding processes. Procurement activities by universities and research institutions shall ensure equal participation opportunities for foreign-invested companies.

(Sources: Ministry of Commerce, VCG)

Source: Intl Services Shanghai