China’s State Council issues 24-point guideline on improving environment for foreign investment

 

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China’s State Council issued a 24-point guideline aimed at further optimizing the environment for foreign investment and attracting more foreign investment, part of its efforts to stabilize the slowing economic growth.

The cabinet pledged to continue the high-quality opening-up by using the advantages of the nation’s super-sized market, attracting and using foreign investment more efficiently, and building a market-oriented, legalized and internationalized business environment. 

The government should step up the protection of the rights and interests of foreign investors, including strengthening enforcement of intellectual property rights, according to the guideline.

China will also increase fiscal support and tax incentives for foreign-invested enterprises, such as temporarily exempting withholding income tax for foreign investors’ reinvestment of their profits into China, it said. 

The State Council will explore a “convenient and secure management mechanism” for cross-border data flows, it said.

In the first half of 2023, China’s actual use of foreign direct investment (FDI) amounted to 703.7 billion yuan ($97.24 billion), down 2.7% from a year earlier, according to China’s official data.

The Ministry of Commerce in July held a roundtable on policy interpretation and communication for foreign business associations, after the ministry set up a roundtable system with foreign enterprises to step up communications and improve the business environment.

Representatives from the American Chamber of Commerce in China, the EU Chamber of Commerce in China, the Japanese Chamber of Commerce and Industry in China, the South Korea Chamber of Commerce in China and more than 30 enterprises, attended the meeting.