SwedCham China Insights for the Week of March 18 - March 22 , 2024

Top news of the week:

China’s industrial output up 7% in January-February

March 18, 2024

China’s value-added industrial output, an important economic indicator, went up 7 percent during the January-February period of 2024, data from the National Bureau of Statistics showed on March 18.

China supports small, medium-sized enterprises

March 19, 2024

China has scaled up policy support for its industrialization of patents, aiming to nurture more small and medium-sized enterprises (SMEs), according to the country’s top intellectual property regulator. The National Intellectual Property Administration issued a plan in collaboration with four government departments, proposing that China raise both the intellectual property awareness and patent industrialization capacities of SMEs by 2025.

HKSAR Legislative Council passes second national security law

March 20, 2024

On March 19, Hong Kong SAR’s 90-seat legislature unanimously passed a new national security law just 11 days after it was tabled. The package, known as Article 23, updates or introduces new laws to prohibit treason, sabotage, sedition, the theft of state secrets and espionage.

Officials introduce China’s latest measures to boost opening-up, foreign investment

March 21, 2024

On March 20, Chinese officials introduced the country’s latest measures to boost high-level opening-up and attract foreign investment, including expanding the “Catalogue of Encouraged Industries for Foreign Investment” and facilitating data flow to lower costs for foreign financial institutions. The media conference was held by China’s State Council Information Office.

Premier Li Qiang announces to attend China Development Forum

March 22, 2024

Premier Li Qiang will make his debut as the keynote speaker at the China Development Forum (CDF), a departure from the tradition of the Vice Premier delivering the opening speech. Traditionally reserved for high-level government officials to engage with global business leaders, the CDF has maintained a 24-year history of facilitating such exchanges. This unprecedented move signals China's strong commitment to attracting foreign investors.

Insight of the week:

China has been striving to encourage and support foreign investment in recent years. Efforts ramped up in 2023 when levels of foreign direct investment (FDI) inflows to China fell by 8 percent year-on-year. Boosting foreign investment was also mentioned as an important task in the 2024 Government Work Report released during the Two Sessions.

On March 19, the State Council released a 24-point plan to boost foreign capital in China. The plan outlines various measures to attract foreign investment, including expanding market access in the high-tech and financial sectors, promoting international business travel, and facilitating cross-border data flows.

One of the main measures is to expand market access for foreign companies by “reasonably reducing” the negative list for foreign investment access. The plan reiterates the directives mentioned in the 2024 Government Work Report, stating that the government remove restrictions on foreign investment in the manufacturing sector, and continue to promote the opening up of telecommunications, medical, and other fields. Meanwhile, the plan will open up more pilot projects in gene diagnostic and therapeutic technologies to selected foreign investment companies. In the financial sector, China will expand the access of foreign financial institutions in the banking and insurance field and the bond market. The plan also encourages foreign investors to invest in the establishment of private equity funds and carry out various investment activities.  

In addition, the plan increases policy support to attract foreign investment. Foreign investors will be encouraged to invest in sectors such as advanced manufacturing, high and innovative technology, environmental protection, integrated circuits, biomedicine, high-end equipment, etc. Supportive tax policies and increased financial support will be provided. China will strengthen energy utilization guarantees and meet the green electricity needs of foreign-invested enterprises in a better way.

Moreover, the plan calls for “cleaning up behaviours and policies that violate fair competition” and providing good services to foreign investors. According to the plan, China will facilitate cross-border data flows, improve visa conditions for foreign businessmen, and protect intellectual property.  

The action plan demonstrates the Chinese government’s determination and efforts to attract foreign investment. Analysts believe that it will provide more opportunities for foreign investors to enter and participate in the Chinese market through expanded access and reduce their operating costs.