China's Regulation on Optimizing the Business Environment states that China will follow the principle of being market-oriented, law-based, and internationalized to optimize its business environment. It stipulates that the business environment must be able to meet the demands of market players and requires the departments concerned to prioritize clarification and simplification of government functions in order to innovate systems and procedures, facilitate joint action, improve the legal system, and benchmark international standards. The goal is to create a fairer, more stable, transparent, and predictable business environment for all market entities.

A 2023 survey involving 210 companies from the United States, Europe, Japan and other countries and regions, shows that most participating companies see China as a critical part of their future strategic development plans. More than 90 percent of the respondents selected China as one of their most important investment destinations. Around 75 percent plan to reinvest in China in 2023, including 68 percent of US companies that are determined to dig deeper into the Chinese market.

Measures taken to optimize the business environment

Expand access for foreign investment

China continues to expand market access, simplify procedures for handling administrative licensing, and implement a nationwide negative list system for market access. Any non-Chinese company may, in accordance with the law, engage in fields not included in the negative list on an equal basis with competitors from countries around the world, including China.

The revised negative list for foreign investment access, which took effect on Jan 1, 2022, further lifts restrictions on foreign investment access in various fields, and introduces major opening-up measures in financing, automobiles and other industries. Foreign ownership caps on passenger car manufacturing companies were removed. Pilot FTZs opened all manufacturing sectors to foreign investors and are exploring widening access to the service sector. Restrictions on foreign investors' access to market research in FTZs were lifted, but Chinese investors must be the controlling shareholders of enterprises in the radio and TV ratings survey sector.

Reduce restrictions on business operations

Since December 1, 2019, China has been "separating permits from business licenses" in its pilot free trade zones. The approval procedures for all enterprise-related business licensing were reformed by adopting the following four methods: direct cancellation of review and approval, replacement with record-filing, application of a notification and commitment system, and improvements of services.

Since July 1, 2021, China has implemented nationwide management of enterprise-related business licensing based on the list. Meanwhile, pilot projects have been further promoted in the pilot free trade zones. The reform of "separating permits from business licenses" facilitates market operation qualification for enterprises and entrepreneurs, thus further reducing access restrictions on business operations.

Ease personal qualifications and simplifyinvestment procedures

To make it easier for foreign nationals to work in China, regions throughout the country have relaxed restrictions on the age, educational level, and work experience of urgently needed talents who have innovative and entrepreneurial, professional, technical and other skills that meet the requirements of local economic development.

Approval procedures for land use for foreign-invested projects have also been simplified to ensure streamlined administration and optimized government services for planned land use. Efforts are being made to accelerate implementation of foreign-invested projects; site selection is now combined with the preliminary approval process for land use; land planning permission and land use approval processes are merged; approval procedures are optimized; an all-in-one planning and all-in-one acceptance and information sharing system has been put in place; and application documents for approval have been simplified

China has reduced costs for the cross-border use of funds. Foreign-invested enterprises are encouraged to expand cross-border use of the renminbi. The scope for pilot programs in facilitating capital account income payments has been expanded. Reform of the registration system for foreign debt issuance by enterprises has been promoted to allow foreign-invested enterprises to independently select the nature of foreign debt to reduce financing costs. Non-investment foreign-invested enterprises are allowed to engage in equity investment in China with capital in accordance with the law, so long as they do not violate the effective Special Administrative Measures (Negative List) for the Access of Foreign Investment and the projects they invest in are real and comply with laws and regulations.

Improving the efficiency of government services

According to the Regulation on Optimizing the Business Environment, China will speed up the building of a national online platform for government services, simplify administrative licensing services, optimize review and approval procedures (especially for construction projects), regulate intermediary services for administrative approval, cut the number of certificates required, facilitate cross-border trade, and establish a mechanism for government-enterprise communication.

The relevant measures include: promoting the standardization of government services with a view to reducing the number of steps, the amount of materials, and the handling time involved; getting matters processed on site within a specified time and without the need for a second visit, and providing centralized, nearby, online and remote channels; accelerating the building of a national online government service platform to make it possible for government services to be accessed via one website nationwide; improving customs clearance efficiency, lowering customs clearance costs, and promoting the processing of international trade businesses through the "China International Trade Single Window" (www.singlewindow.cn).

Promotion of fair competition

On Jan 1, 2020, China brought into force the landmark Foreign Investment Law, which includes a comprehensive and fundamental set of legal standards for foreign investors and aims to better protect their rights and interests.

China has stressed a level playing field for domestic and foreign companies, banned forced technology transfer, and improved the mechanism for foreign-invested firms to file complaints, according to the Foreign Investment Law and its implementing regulations.

Regulation of fee collection

China has implemented various national tax and fee cut policies to benefit market entities and unleash their vitality by reducing their operating costs. From 2016 to 2021, total additional tax reduction & exemption and cancelation of administrative and institutional fees exceeded 8.8 trillion yuan, and 90 percent of tax related matters, as well as 99 percent of tax declaration related matters, can now be handled online or via mobile phone.

China will continue to relax market access and improve the system for promoting foreign investment to cultivate an environment that attracts, facilitates and stabilizes businesses.