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The tensions between the two largest economies in the world have increased in recent years.
Florence lo | Reuters
Beijing – China is dealing once again to boost foreign investment, amid geopolitical tensions and calls for companies for more concrete actions.
On February 19, the authorities published a “2025 Action Plan to stabilize foreign investment” To facilitate foreign capital, invest in national telecommunications and biotechnology industries, according to a translation of CNBC of the Chinese.
The document required clearer standards in government acquisition: an important problem for foreign companies in China, and for the development of a plan to gradually allow foreign investment in the education and culture sectors.
“We hope to see this implemented in a way that offers tangible benefits for our members,” Jens Eskelund, president of the European Union Chamber of Commerce in China on Thursday.
The Chamber said that China has already mentioned plans to open telecommunications, medical care, education and culture to foreign investment. Greater clarity about public procurement requirements is a “positive positive,” said the camera, and said that “if completely implemented,” could benefit foreign companies that have largely invested to locate their production in China.
China’s last action plan was launched at the same time that the Ministry of Commerce revealed that foreign direct investment in January fell 13.4% to 97.59 billion yuan ($ 13.46 billion). That was after the FDI fell by 27.1% in 2024 and fell by 8% in 2023, after at least eight consecutive years of annual growth, according to official data available through wind information.
All regions must “ensure that all measures are implemented in 2025 and effectively promotes the confidence of foreign investment,” the plan said. The Ministry of Commerce and the National Commission for Development and Reform, the Economic Planning Agency, jointly published the Action Plan through the Executive Agency of the Government, the State Council.
Officials of the Ministry of Commerce emphasized at a press conference on Thursday that the Action Plan would be implemented at the end of 2025, and that details on subsequent support measures would arrive soon.
“We appreciate the recognition of the Chinese government of the vital role played by foreign companies in the economy,” said Michael Hart, president of the US Chamber of Commerce in China, in a statement. “We hope to have more discussions about the key challenges facing our members and the necessary steps to guarantee a more leveling playing field for market access.”
The latest survey of members of AMCHAM China, published last month, discovered that a record participation is consider or have begun to diversify manufacture or supply far from China. The survey of the previous year had found that the members were finding it More difficult to earn money in China that before the Covid-19 pandemic.
The spending of consumers in China has remained dazzled from the pandemic, and retail sales only grow in low digits in recent months. Meanwhile, tensions with the United States have intensified since the White House has restricted Chinese access to advanced technology and raised tariffs on Chinese products.
‘A very strong signal’
Although many aspects of the action plan were publicly mentioned last year, some points, such as allowing foreign companies to buy local capital stakes using national loans, are relatively new, said Xiaojia Sun, a partner based in Beijing in Junhe Law.
He also highlighted the call of the plan to support the ability of foreign investors to participate in mergers and acquisitions in China, and pointed out that it potentially benefits the lists abroad. The practice of SUN covers companies, mergers and acquisitions and capital markets.
The most important question remains China’s resolution to act on the plan.
“This action plan is a very strong signal,” said Sun in Mandarin, translated by CNBC. She said that Beijing will continue with the implementation, and pointed out that her release was similar to a rare and high profile at the beginning of the Chinese president. XI Jinping and Entrepreneurs.
That meeting on February 17 included the founder of Alibaba, Jack Ma and Liang Wenfeng of Deepseek. In recent years, regulatory repressions and uncertainty about future growth had damping business confidence and the feeling of foreign investors.
China needs to achieve a balance between tariff reprisals and IED stabilization, CITI analysts said earlier this month.
“We believe that China’s political leaders are probably cautious by attacking the United States (multinationals) as a form of retaliation against US tariffs,” analysts said. “IED enters China, provides technology and knowledge, creating jobs, income and profits, and contributing to tax revenues.”
In a relatively rare recognition, the officials of the Chinese Ministry of Commerce indicated on Thursday the impact of geopolitical tensions on foreign investment, including the decision of some companies to diversify far from China. They also pointed out that foreign invention companies contribute to almost 7% of employment and about 14% of taxes in the country.
Previously, Official Comment of the Ministry of Commerce About any drop in FDI tended to focus only on how most foreign companies remained optimistic about long -term perspectives in China.
