In a speech on Sunday, Chinese President Xi Jinping set the tone for the following five years by highlighting the need for "higher-quality" growth and national self-sufficiency.
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| The Bund, Shanghai, china |
Zhao Chenxin, vice chairman of the commission and a member of the Chinese Communist Party leadership group, stated that "China's economy has transitioned from a period of high-speed growth to one of high quality."
Zhao announced on Monday that China would support foreign investment in high-tech, advanced manufacturing, better services, energy efficiency, and environmental protection.
A Chinese official said on Monday that the nation's growth objectives have changed and that conditions for foreign investment will also change.
In a speech on Sunday, Chinese President Xi Jinping set the tone for the following five years by highlighting the need for "higher-quality" growth and national self-sufficiency.
Compared to previous years, he said fewer things about an economic boom.
Following Xi's speech, the National Development and Reform Commission, the organization in charge of economic planning, held a press conference with representatives in charge of ensuring the security of food and energy.
Zhao Chenxin, vice chairman of the commission and a member of the Chinese Communist Party leadership group, stated that "China's economy has transitioned from a period of high-speed growth to one of high quality."
He added, "We also face a new situation for luring foreign investment."
According to a translation of the Mandarin comments by CNBC, that is the case.
For its initial burst of growth in the 1990s and early 2000s, China heavily relied on foreign investment as new government policies opened up the market to more foreign competitors after decades of restrictions.
For instance, a report from the Hinrich Foundation found that in 2013, foreign companies in China were responsible for about 27% of employment and a third of the country's GDP.
According to the report, a large portion of that business was in computers, electronics, automobiles, and leather-related products.
However, foreign companies have recently complained about forced technology transfers, a lack of intellectual property protection, and unequal access to the Chinese market compared to their competitors.
With tariffs and sanctions, the United States under the Trump administration attempted to address these problems.
Zhao predicted on Monday that China would support foreign investment in high-tech, advanced manufacturing, better services, energy efficiency, and environmental protection.
Additionally, he mentioned the central, western, and northeastern regions of China as having particular support for such investments. Compared to the south and east coast, those regions of the nation are less developed.
In a September report about European investment in China, Rhodium Group analysts stated that "given the size and growth of the Chinese economy in recent decades, one would have expected the country to attract a much broader range of foreign firms."
But in our review of recent trends, three different types of investors are noticeably missing.
The absence of new market entrants, fewer European companies looking to acquire Chinese businesses, and a lack of investors in the services sector were cited by the analysts.
German FDI increased by about 30% in the first eight months of this year compared to the same period last year, outpacing the 23.5% pace seen in the first seven, according to China's Ministry of Commerce.
The U.S. investment, which according to official data increased by about 36% in the first seven months of the year, was not updated by the ministry.
(Source: CNBC NEWS)
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