China welcomes manufacturing set-ups for foreign ownership

By Staff Report September 9, 2024 1:48 pm IST

China will lift all foreign investment restrictions on its manufacturing sector, revising the “negative list” to boost economic recovery.

All restrictions on foreign participation in China’s manufacturing sector will be removed from November 1, per the newest “negative list,” which outlines industries restricted to foreign and private investment as reported by South China Morning Post. In August 2023, China introduced new guidelines to boost foreign investments in the face of a sluggish post-pandemic economic rebound. Despite these efforts, foreign direct investment (FDI) between January and July saw a nearly 30% decline, falling to 539.5 billion yuan (US$76.1 billion), according to official figures.

According to data released by Vice-Premier He in Xiamen, China had around 1.18 million foreign-funded companies, contributing 28.4 trillion yuan in investment, by the end of 2023. “We warmly invite foreign enterprises to seize this golden opportunity, set long-term goals in China, and continue to deliver impressive results,” He said, emphasising the positive outlook for China’s economy and the potential of its market.

While Beijing has long assured the global community about China’s business climate, foreign chambers of commerce have frequently voiced concerns about market access restrictions. The “negative list,” released by the National Development and Reform Commission and the Ministry of Commerce, reduces the number of sectors off-limits to foreign investors from 31 to 29. The list was last revised in 2021.

In the first seven months of this year, foreign investment in manufacturing grew by about 3%, reaching 154.48 billion yuan.

The revised negative list also eliminates restrictions on foreign ownership in cloud services and other value-added telecommunications services within specific domestic pilot zones, particularly in major regions such as Beijing, Shanghai, Shenzhen, and Hainan. This includes sectors like internet data centres, content delivery networks, and internet service providers.