Global companies get helping hand

Global companies — which have long played a key role in China's thriving economy — will gain greater access to the country's vast, lucrative market as it takes further steps to improve the business climate and lower government-imposed costs, to ease the burden on market entities and unleash their vitality.

To ensure legitimate market access, negative lists will be enforced, but all unnecessary barriers are to be removed before the end of this month, according to a circular issued on Sept 15 by the State Council, China's Cabinet.

The negative list lays out the specific industries in which foreign investors are not permitted to operate.

Further efforts will be made to facilitate registration. By the end of this month, unified regulations concerning the establishment of foreign businesses, inspection standards and changes in registration should be compiled. To gradually realize integrated services for both domestic and foreign companies, online processing for the setup of foreign companies and registration changes will be advanced, said the circular.

"We appreciate the further guidance regarding foreign investment and see the new regulation as a signal to ease market access for German and other global companies," said Jens Hildebrandt, executive director of the German Chamber of Commerce in North China.

The Chinese market is of paramount importance to many German companies, which are committed to it and continue to invest in it. These companies expect growth in many industries, especially in the fields of decarbonization, e-mobility and connected driving in the years ahead, he said.

Zhang Yongjun, a researcher at the China Center for International Economic Exchanges in Beijing, said the enhancement of the domestic market to meet international standards should be prioritized to boost investor confidence.

China has reduced the number of industries on negative lists for five consecutive years. The number of off-limits industries for foreign investors was reduced to 31 last year from 33 in 2020, while the number of restricted industries in pilot free trade zones fell to 27 from 30 during the same period.

Both online and offline business-related services will be optimized, including those pertaining to digital business licenses, contracts, seals, investment and construction project approvals, cross-border trade and tax payments, the circular stated, adding that fair competition among market entities and enhanced intellectual property rights protection will be ensured, according to the circular.

In addition, administrative approval and arbitrary certification will be regulated for industrial product manufacturing, circulation and use. Unnecessary administrative approvals, inspections, tests and certifications will be canceled.

By the end of August, the government had abolished, revised or enacted 520 regulations to improve the legal environment for foreign investment, according to information released by the Ministry of Commerce.

Zhao Ping, vice-president of the Academy of China Council for the Promotion of International Trade in Beijing, believes that foreign investment will continue to flow steadily into the country this year, as many global companies are considering not only the sheer size of the market but also its rising profile in the international division of industries, the significance of its complete industrial system, and its future plans for industrial and consumption upgrades.

Stefan Hartung, chairman of the board of management of Robert Bosch GmbH, a German industrial and technology group, said that China is the largest single market for the group and offers long-term growth opportunities.

"To tap future long-term potential, Bosch will continue to develop local expertise in China, especially in strategic growth areas such as electrification, hydrogen, fuel cells, artificial intelligence and the internet of things, or IoT," he said.

Over the past few years, China has made great progress in improving the business environment by significantly reducing the number of restricted industries, which has deepened the opening-up of the manufacturing sector and eased the entry of service industries into its pilot free trade zones, said Nicolas Poirot, president and CEO for the China unit of Air Liquide Group, a French industrial and medical gas supplier that runs 120 plants in the country.

In addition to building two large-scale hydrogen production plants in the Shanghai Chemical Industry Park earlier this year, Air Liquide's first biomethane production unit in the country will enter service by year's end.

China has urged its working teams to provide greater support to key foreign-funded projects to stabilize foreign investment, officials said at a meeting held by the Ministry of Commerce in late September.

While strengthening regular communications with foreign companies and improving their level of service, these teams are encouraged to promote the early construction of landmark foreign-funded projects in the manufacturing sector, said Guo Tingting, assistant minister of commerce.

The working teams have been established by the government to enhance service guarantees for foreign-funded companies and key foreign-funded projects, to permit foreign trade and foreign investment coordination mechanisms to operate more freely.