China Announces to Ease Foreign Investment Rules, What're They?

-- The latest measures will see an opening up of the tourism and elderly care sectors in three major cities and the province of Hainan.

-- The moves are part of a pilot scheme announced in April 2021 that covered 12 service industries.

Service sectors, including tourism and elderly care, in some of China’s largest cities will be allowed to open to foreign investment, as the State Council announced.

The measures are part of a pilot project that will run until April 2024 and affect companies in Chongqing, Shanghai and Tianjin, as well as  Hainan.

They form part of a wider plan announced in April 2021 to RELAX the rules on foreign investment for three years.

It contained 203 pilot projects and covered 12 key service industries, including technological services, financial services, healthcare, education and e-commerce.

Also, qualified foreign-invested travel agencies in Shanghai and Chongqing will also be allowed to offer overseas tours, excluding Taiwan.

“In terms of scale, the population of the four areas is considerable, which is equivalent to the opening up of the tourism and elderly care market of up to 80 million people to foreign companies,

Besides, the moves to relax restrictions on overseas tourism comes after Covid-19 restrictions made it almost impossible for ordinary Chinese to leave the country.

Previous relaxations on foreign investment include measures to support the establishment of wholly foreign-owned finance companies in Shanghai and Hainan.

Hainan and Chongqing have also been cleared to allow foreign banks to participate in import and export tax payment services and related business guarantees, while Hainan will also encourage overseas financial institutions to invest in and set up securities companies.

According to the data, China’s GDP per capita had passed US$10,000 and foreign investment in the service sector accounted for 70 per cent of the total.

But on the other hand, the added value of the service industry accounted for about 55 per cent of China’s GDP – which was about 20 percentage points less than that of developed countries.

As the director said,“There is a need to further expand the opening up of the service sector and to shape new advantages on the international stage.”

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Sources:South China Morning Post, China Daily.

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