China Reforms to Attract Foreign Investors

On 21 September, the Beijing Municipal Bureau of Commerce and the Shanghai Municipal Government respectively issued policies to facilitate foreign investment across various domains, such as cross-border data, cross-border capital flows, reinvestment, and talent. Both stated that foreign investors should be able to freely transfer their investment-related funds in or out of China without delay, provided that the money is “real and compliant”.

In its drafting instructions, the Beijing Municipal Bureau of Commerce mentioned the importance of creating new institutions designed to facilitate the promotion, protection, and management of investment through legislation, while creating a more transparent, stable, and predictable legal environment for foreign business and investment. Shanghai’s implementation plan proposes multiple measures that involve fully granting national treatment to foreign financial institutions, while exercising prudent supervision over their activities.

This year, the State Council has taken several measures to improve the business environment for foreign investors in China. At the end of August, it released the “Opinions of the State Council on Further Optimising the Foreign Investment Environment and Intensifying Efforts to Attract Foreign Investment”. In September, the People's Bank of China and the State Administration of Foreign Exchange held a forum with foreign enterprises and financial institutions. Both developments sent out clear signals of the government’s priorities for improving the business environment and enhancing financial management capabilities. As the two most important political and financial centres in China, the fact that both Beijing and Shanghai have taken the lead on this is indicative. Regulatory authorities are increasingly aware of the necessity to comprehensively reform the financial system and encourage foreign investment, at the same time to ensure financial stability and security.?

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