Guangdong doubles efforts to attract foreign investors
September 18, 2018 Category China News Round-up, Weekly
Guangdong province, the center of China’s export industry, is redoubling its efforts to woo foreign investors to counterbalance the increasing impact of the trade war with the United States. The provincial government has updated its foreign direct investment rules to give investors additional incentives to set up plants in the Pearl River Delta, the area just north of Hong Kong that is home of thousands of export businesses to cushion the economic downturn amid the escalating trade war, economists and industry insiders said.
Foreign investors will be allowed to establish solely foreign-owned enterprises in a number of key industries in Guangdong province. The industries include manufacturing of special purpose and new-energy vehicles, design, manufacturing and maintenance of ships, aircraft, helicopters weighing 3 metric tons and above, unmanned planes and aerostats, construction and operation of gas stations, international marine shipping and carriage of passengers by railway. A number of new measures will also be issued in the next three months to help attract foreign businesses to invest in high-end industries in the province. Financial rewards and preferential policies in land use will be given to qualified foreign investors. Foreign investment in Guangdong grew year-on-year by 3.1%, 0.8 percentage points higher than the national average, to CNY88.93 billion in the first seven months of 2018, the China Daily reports.
The new regulation comes amid growing signs that the trade war is hitting the province’s export industry hard. Guangdong’s manufacturing sector contracted in August for the first time in 29 months, according to the purchasing managers’ index (PMI). The longer the trade war continues, the greater the incentive for companies now operating in Guangdong to relocate their factories to other places, such as Southeast Asia and Africa. Guangdong, in particular, faces major challenges to attract and retain businesses as its labor, land and utility costs are higher than in other emerging markets, the South China Morning Post reports.
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