Beijing may relax some foreign investment caps during Trump’s November visit
October 24, 2017 Category China News Round-up, Weekly
China could loosen foreign ownership caps for joint ventures in certain industry sectors where Chinese companies already possess a competitive edge as part of a wider opening up of the world’s second-largest economy during U.S. President Donald Trump’s visit to Beijing next month, experts say.
“This is an area that the U.S. and others have raised with China again and again, and it’s possible that China may be open to concessions” when Trump visits, Scott Kennedy, a China expert at the Washington-based Center for Security and International Studies, said at an event organized by the Council on Foreign Relations. Foreign ownership caps in China vary across different industries, with some at 49%, 50% or 20%.
U.S. President Donald Trump will visit Beijing on November 8 and 9. His administration has been pressing China to further open market access and provide reciprocal treatment to U.S. companies in China. The world’s two largest economies appeared on the verge of a trade war in July after failing to reach agreement in Washington during the first round of the U.S.-China Comprehensive Economic Dialogue. However, investment caps on some types of foreign securities companies appear to have been removed, and the National Development and Reform Commission (NDRC) also has decided to lift restrictions on foreign investment in the transport sector and in unconventional oil and gas production.
Government researchers also said that China should do more to protect intellectual property rights and create a level playing field for foreign companies to lure investment from overseas in the coming years. Speaking at a forum organized by a state think tank in Beijing, they said the authorities were aware that long-term capital inflows had stagnated and that there were more and more complaints from the foreign business community about difficulties they had encountered in China.
Despite promises from Beijing to further open up this year, the Organization for Economic Cooperation and Development (OECD) lists China as one of the most restricted markets globally. China still applies restrictions and bans on foreign investment across 65 sectors.
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