China takes another big step towards further opening to the world
Note: The following article is taken from the Chinese-language "Commentaries on International Affairs".
Just days after China's President Xi Jinping announced major new measures to accelerate the process of opening up China's domestic market to foreign investment at the G20 Summit in Osaka, Premier Li Keqiang has made further commitments to work towards this goal at the 13th Summer Davos Forum in Dalian in northeast China.
Summer Davos is an important platform for economic dialogue, so it's no surprise that the participants are concerned about how China will continue its process of opening up. On Tuesday, Premier Li told the audience gathered for the opening of the forum that China will deepen the opening up of its finance industry and remove the restrictions on foreign ownership of securities, futures, and life insurance firms in the year 2020, a year earlier than originally planned. The country will also reduce the restrictions on foreign investment in the value-added telecommunications and transportation sectors, and expand the opening up of the country's bond market.
A floral sculpture for the Summer Davos Forum in Dalian, China. [Photo: IC]
These specific steps are the next move towards implementing the measures announced by President Xi at the G20 Summit, namely the further opening of China's market, a proactive expansion of imports, the continuous improvement of the business environment for foreign enterprises, the full implementation of equal treatment for domestic and foreign-owned firms, and the advancement of negotiations on economic and trade deals. Isabelle Durant, the deputy secretary general of the United Nations Conference on Trade and Development, described these as important measures that would help to resolve some of the problems in the world economy. And Robert Lawrence Kuhn, a well-known American expert on China, said that China has been "translating Xi's words into actions" by further broadening international access to China's market.
It took less than two days after the closing of the Osaka summit for China to take concrete steps towards keeping its word. On June 30, China released two shortened negative lists, which define the sectors of the economy closed to foreign investment. On the same day, China also issued a revised catalog of industries in which it is actively encouraging foreign investment. The slimming of the negative lists and the new foreign investment catalog show that China hasn't wavered in its mission of reform and opening up, despite rising global trends towards protectionism and unilateralism.
On top of the measures announced at the G20 Summit and Summer Davos, China is already working to improve its legal and institutional systems to improve its business environment. Supporting regulations for the foreign investment law introduced earlier this year are being formulated, and plans are being prepared to abolish outdated regulations before January 1, 2020. China is also strengthening its intellectual property protections and introducing a system of punitive damages to significantly increase the cost of intellectual property theft.
Data from the United Nations Conference on Trade and Development show that global foreign direct investment was down 13 percent last year compared with 2017. Despite this, foreign investment in China grew by four percent, and in the first five months of this year, this trend has continued to gather pace: the actual use of foreign capital reached 369.06 billion yuan, an increase of 6.8 percent over the same period last year. It's clear that foreign investors see the value of China's thriving market.
At the G20 Summit, President Xi told Germany's Chancellor Angela Merkel that China's commitment to expand its process of opening up is unshakable. China will continue to improve its business environment, create more opportunities for international investors, and inject more certainty into an uncertain world.