China’s state planner has said more opening measures will be introduced in the agriculture, mining, manufacturing and service industries, letting wholly foreign-owned firms operate in more sectors.
The “negative list” of industries that are off-limits to foreign investors will be further shortened, Mr Ning Jizhe, vice-chairman of the National Development and Reform Commission (NDRC), said on the sidelines of the annual parliamentary meeting yesterday.
He stressed that foreign firms will be treated as equals with Chinese companies before and after they enter China.
“We are working with relevant departments and local governments… to ensure that standards for market access are consistent for both foreign and local firms,” he told reporters.
Foreign business groups in China have, over the years, complained of regulations and practices that favour Chinese firms. They say these help the local companies to gain an unfair advantage over their foreign counterparts.
Mr Ning said China promotes the fair treatment of foreign-funded enterprises in areas such as government procurement, standards setting, industrial policies, licensing and registration as well as fund-raising after they enter the country.
He added that China remains committed to facilitating foreign investments, especially in sectors such as new energy, advanced manufacturing, petrochemicals as well as electronics and information.
Mr Ning noted that this year’s annual meeting of lawmakers will review a draft foreign investment law, which clearly stipulates intellectual property rights protection for foreign investors and firms, and bans forced technology transfers through administrative means.
“This will certainly provide a more comprehensive and powerful rule of law guarantee for foreign investment rights,” he said.
Intellectual property thefts and forced technology transfers are some of the key sticking points in the ongoing trade war between China and the United States.
The draft law is expected to be passed at the closing of the annual parliamentary session in a little over a week. China has fast-tracked its passage in part to create favourable conditions to resolve the current trade stand-off with the US.
Other than citing the importance of foreign firms, Mr Ning also played up private enterprises’ role in contributing to China’s growth.
At the same briefing, NDRC chief He Lifeng said private enterprises contribute more than 50 per cent of the tax revenues, account for more than 60 per cent of the gross domestic product, and provide more than 70 per cent of technological innovations in the country.
They also create jobs for more than 80 per cent of urban residents and account for more than 90 per cent of the total number of companies in China.
Mr He stressed that top Chinese leaders fully support private firms, citing President Xi Jinping’s visit to private companies of all sizes during his trip to the north-eastern provinces as well as southern Guangdong province in September and October last year.
He said a key focus in the government’s work for this year is to help uplift private enterprises through heavy tax cuts, more lending for smaller firms, especially in obtaining loans for mid-to-long term investments, and also support to create a better business environment.
He added that he is confident that with such support, private firms, along with state-owned enterprises and foreign companies, will help provide stable growth for the economy this year.