Tensions between the two largest economies in the world have increased in recent years.
Florence LO | Reuters
Beijing – China is once again trying to strengthen foreign investments, in the midst of geopolitical tensions and business calls to more concrete actions.
On February 19, the authorities published a “Action plan 2025 to stabilize foreign investments” To facilitate foreign capital to invest in the interior industries of telecommunications and biotechnology, according to a CNBC translation of the Chinese.
The document provided for more clear standards in the government’s supply – a major Problem for foreign companies In China – and for the development of a plan to gradually allow foreign investments in the education and culture sectors.
“We are impatient to see this implemented in a way that offers tangible advantages for our members,” Jens Eskelund, president of the European Union Chamber of Commerce said on Thursday in China.
The Chamber stressed that China has already mentioned the plans to open telecommunications, health care, education and culture to foreign investments. A greater clarity on the requirements on public procurement is a “notable positive,” said the Chamber, noting that “if it is fully implemented”, it could benefit foreign companies that have invested massively to locate their production in China.
The last Chinese action plan was published roughly at the same time when the Ministry of Commerce revealed that direct foreign investment in January was 13.4% to 97.59 billion yuan ($ 13.46 billion). It was after the FDI plunged 27.1% in 2024 and fell 8% in 2023, after at least eight consecutive years of annual growth, according to official data available by the wind.
All regions should “ensure that all measures are implemented in 2025 and effectively increase the confidence of foreign investments,” said the plan. The Ministry of Commerce and the National Development and Reform Commission – the Economic Planning Agency – has jointly published the action plan through the government’s executive organization, the Council of State.
Managers of the Ministry of Commerce stressed Thursday in a press conference that the action plan would be implemented by the end of 2025, and that details on the subsequent support measures would soon come.
“We appreciate the recognition by the Chinese government of the vital role that foreign companies play in the economy,” said Michael Hart, president of the American Chamber of Commerce in China. “We are impatiently awaiting more in -depth discussions on the main challenges that our members are faced and the stages necessary to ensure a more level playground for market access.”
Amcham China’s latest survey, published last month, revealed that a record share is Considering or began to diversify manufacture or supply of China. The investigation of the previous year had revealed that the members found it More difficult to earn money in China that before the Pandemic COVID-19.
Consumption expenses in China have remained dull from the pandemic, retail sales only going through low figures in recent months. Tensions with the United States have increased because the White House has limited Chinese access to advanced technology and has taken prices from Chinese products.
‘A very strong signal’
Although many aspects of the Action Plan have been mentioned publicly last year, certain points – such as allowing foreign companies to buy local participations using domestic loans – are relatively new, said Xiaojia Sun, partner Based in Beijing at Junhe Law.
She also underlined the call of the plan to support the ability of foreign investors to participate in mergers and acquisitions in China, and noted that it potentially benefits from advertisements abroad. Sun’s practice covers companies, mergers and acquisitions and capital markets.
The more important question remains the determination of China to act on the plan.
“This action plan is a very strong signal,” said Sun in Mandarin, translated by CNBC. She said that she expects Beijing to continue with the implementation and noted that her release was similar to a rare meeting and very publicized earlier in Chinese President’s week Xi Jinping and Entrepreneurs.
This rally on February 17 included the founder of Alibaba, Jack Ma and Liang Wenfeng of Deepseek. In recent years, regulatory repression and uncertainty about future growth have attenuated business confidence and the feeling of foreign investors.
China must find a balance between tariff reprisals and the stabilization of the IED, said Citi analysts earlier this month.
“We believe that Chinese decision -makers are probably careful to target us [multinationals] As a form of reprisals against American prices, “said analysts.” The IED enters China, providing technology and know-how, job creation, income and profits, and contributing to tax revenue. “”
In relatively rare recognition, officials of the Chinese Ministry of Commerce noted on Thursday the impact of geopolitical tensions on foreign investments, including the decision of certain companies to diversify from China. They also stressed that companies abroad contribute to almost 7% of employment and around 14% of the country’s taxes.
Previously, Official commentary from the Ministry of Commerce Regarding any drop in the IED, he tended to focus solely on how most foreign companies have remained optimistic about the long -term perspectives in China.
