As part of an effort to build “a new open economic system” in China
A new guideline on further opening-up and attracting foreign investment was published by the Shanghai government on 27 April 2017. It highlights 33 measures, covering three main points:
1) Remove restrictions to market access for foreign investment
According to the new guidelines, hurdles for foreign investment access will be eliminated in a number of manufacturing sectors, including rail transportation, motorbikes, and ethanol fuels. Foreign capital will be allowed in banking, securities, fund management, futures and insurance, and gradual opening-up will be promoted in telecommunications, the internet, culture, education, and the transport industries.
Foreign investment is also encouraged in infrastructure, energy, water conservancy, and environmental protection through franchising.
For high-level foreign talent and senior professionals employed by qualified high technology companies, the age restriction of 60 will be lifted when applying for five-year work visas. Foreigners can also apply for permanent residence in China if they invest a minimum of US$1 million in Shanghai within three consecutive years or US$500,000 in government-encouraged industries.
2) Build a fair market for foreign companies
Foreign investment companies will be treated equally in market entry, government bidding, intellectual rights protection, and trading procedures.
Where foreign companies may previously run into issues with obtaining for a business licence, the government now commanded that related departments realign application procedures and standards for foreign-invested enterprises with that of domestic-invested enterprises.
Financing channels will also be opened up to allow foreign companies to restructure and get listed, issue bonds, and access funding through over-the-counter stock exchanges. Further, policies implemented in the free trade zone, such as the negative list and easier customs clearance, will be expanded to more industrial parks.
3) Further attracting foreign investment
Local authorities are permitted to form and issue favourable policies to attract and support foreign-invested projects that can facilitate employment, economic development and technology innovation, and reduce the costs of investment and operation of foreign-invested enterprises.
The central, western and northeast regions will receive support to undertake industrial transformation of foreign investment. In addition, foreign-invested enterprises in supported industries in western regions will enjoy preferential tax policies.
China is planning to attract more foreign investment by opening-up and building a more competitive market, and the new guideline strives to achieve this.
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