Sagging Japanese investment in China is expected to pick up after several years of declines, as better relations between the two nations boost business confidence, according to a white paper by the Japanese Chamber of Commerce and Industry in China. But it also called for fair treatment, more transparent administrative procedures, and a further opening of the market. Of the 8,852 Japanese businesses surveyed late last year for the white paper, some 40.1% said they were willing to expand their business in China, while 7.1% wanted to scale down or withdraw, compared to 38.1% wanting to expand in 2015, and 10.6% keen to scale down or leave. It was the first time the proportion of Japanese businesses aiming to expand in China had grown, albeit only slightly, in recent years, and it was also the first time since 2011 that the percentage of those wanting to exit declined. “Our current conclusion is that Japanese business would act more positively towards investing in China from now on,” said Yoshihisa Tabata, Director of the Beijing office of the Japan External Trade Organization (JETRO), and lead researcher and author of the white paper. He also noted that there was a strong correlation between business sentiment data gleaned from the annual survey and the actual foreign direct investment (FDI) figure the following year. Japanese businesses signaling their willingness to invest in China reached the lowest level in the 2015 study, and the following year FDI from Japan fell 3.1% year-on-year to USD3.1 billion – the lowest investment since 2001. It was the fourth straight year FDI from Japan had declined. Last year’s FDI was also half that of the peak in 2012, when Japanese investors poured some USD7.4 billion into China, the South China Morning Post reports.

French President Emmanuel Macron wants to convince China’s closest allies in Europe that curbing foreign takeovers in strategic industries was in their interest, warning EU governments not to be naive in global trade. But countries in Eastern and Southern Europe that are dependent on Chinese investment have rejected any steps against Beijing. “Things are changing because we see the disorder of globalization and the consequences in your own country. I want to build an alliance around this idea,” Macron told a news conference during the summit of EU leaders. “I am for free trade, but I am not for naivety.” State-owned ChemChina’s USD43 billion purchase of Swiss pesticides and seeds group Syngenta, Beijing’s biggest overseas sale to date, has deepened concerns in Europe that the bloc is ceding control of its advanced technology, EU diplomats said. President Macron has found some support from Germany and Italy, and the European Commission will look into ways to limit foreign takeovers in areas such as energy, banking and technology, where China seeks Europe’s know-how. Chinese direct investment in the European Union jumped by 77% last year to more than €billion, compared with 2015, while EU acquisitions in China fell for the second consecutive year, according to the Rhodium Group. Frits Bolkestein, a former Dutch European Commissioner, criticized Macron’s proposal. “This Colbertist instinct – that French wealth should serve the French state – runs deep among its elite,” he said in a column in Politico, referring to Jean-Baptiste Colbert, French King Louis XIV’s Minister of Finance and Industry. “The last thing we need now is for hard-won progress to be rolled back by protectionism,” Bolkestein added.

Rolled out in September 2013, the China (Shanghai) Pilot Free Trade Zone has become a model for economic growth. “Shanghai FTZ became a national test model – it was not just a local initiative,” said Weng Zuliang, Party Secretary of Pudong. The Shanghai FTZ has expanded to 120.72 square kilometers from its original size of 28.78 sq km. Last year, it produced 75% of GDP for the Pudong New Area. It also accounted for one-fourth of the city’s GDP. The “negative list for foreign investment” in the zone has been dramatically reduced, while the number of newly registered companies increased to more than 40,000 since 2013. The time needed for clearance of imported container goods and airfreight has been reduced by 25% and 11% respectively. One of the challenges ahead is for the FTZ to become more closely linked to the country’s Belt and Road Initiative to let more companies reach overseas markets. Companies registered in the Shanghai FTZ have reported a total trade volume of CNY333.9 billion with economies involved in the Belt and Road Initiative. In the first quarter of this year it topped CNY95 billion, up 28.7% compared to the same period in 2016. By the end of last year, companies registered in the trade zone had funded 108 projects in 25 countries related with the Belt and Road Initiative.

Top Chinese officials and Ministers of Health from Central and Eastern European countries (CEEC) pledged to give substance to the China-CEEC partnership, especially in healthcare, as they signed the Budapest Declaration at the Third CEEC-China Health Ministers’ Meeting. Medical cooperation has progressed greatly since China and Hungary upgraded their bilateral partnership to a comprehensive strategic one in May during the Belt and Road Forum for International Cooperation in Beijing. Vice Premier Liu Yandong witnessed the signing of the declaration and related documents on the establishment of the China-CEEC Human Resources for Health Cooperation Network, the China-CEEC Hospital Alliance official website, and the China-CEEC Health Policy Research Network. The Health Economy Trade Exhibition was also held in Budapest to promote health innovation cooperation and build a platform for health industries in China and the CEEC.

China ranks No 22 on the Global Innovation Index 2017 by the World Intellectual Property Organization, Cornell University, and business school INSEAD, moving up by three notches year-on-year. The country is once again the only middle income economy in the top 25 of the innovation list. It has progressed in five indicator categories, including institutions, creative output, and knowledge and technology output.