Written by Joe Cash and Yerin Mo
BEIJING (Reuters) – China on Tuesday freed up access to manufacturing and some service sectors in a bid to prevent foreign investors from leaving, while also opening up key sectors vital to its future competitiveness, from artificial intelligence to space. He vowed to foster an industry that thinks.
The pledge, announced at the annual Congress, sent a clear message that China is open for business as long as it fits the national agenda, now defined by the pursuit of self-sufficiency.
The post-coronavirus economic recovery has been slower than expected, and foreign investor sentiment has worsened after authorities raided offices, while trade tensions with Western countries are intensifying due to technological innovation and efforts to become self-reliant. Things like this are happening inside.
“Announcements don't move markets, and promises don't drive investment,” said Sean Stein, president of the Beijing-based China-American Chamber of Commerce, adding that announcements of reforms were encouraging.
“The key, as always, is complete and timely implementation.”
President Xi Jinping's goal of freeing access to foreign investment in manufacturing at the Belt and Road Forum last October has done little to boost investor confidence.
The powerful state planner, the National Development and Reform Commission, also said Tuesday it plans to ease restrictions on market access in service industries such as telecommunications and medical services, but did not provide details.
In 2022, the Chinese government has reduced the number of sectors on the “negative list,” which restricts or prohibits market access, from 123 in 2020 to 117.
In China's auto sector, electric car makers such as Tesla are allowed to set up wholly owned subsidiaries, and foreign companies such as BMW and Volkswagen are allowed to take majority control in joint ventures.
However, due to changes in the economic situation, foreign investors have largely withdrawn from China's manufacturing industry, while foreign direct investment contracted in 2023 for the first time in more than a decade.
Last year, South Korea's Hyundai Motor sold its joint venture factory in Chongqing as it reviewed its China strategy.
Western Digital Corp. on Monday sold an 80% stake in its Shanghai flash memory facility to Chinese chip assembly and testing company JCET Group.
“Foreign investors will face significant competition from Chinese investors, so their investment decisions will be determined by the returns they receive and their global strategy, not what the government says,” said Dan Wang, chief economist at Hang Seng Bank China. Probably.'' .
independence
Premier Li Qiang is committed to a goal set out last year by his predecessor, Li Keqiang, of increasing independence and strength in science and technology, as friction between China and the West intensified last year and is likely to continue to intensify. was reiterated. .
China is increasingly emphasizing the role of government in directing resources to achieve goals.
Since last year, the ruling Communist Party has taken on a greater role in technology-related policy-making, following a sweeping reshuffle of the ministry announced in 2023.
The company's efforts have made some progress so far, such as last August's launch of a surprising new smartphone by Chinese tech giant Huawei, which is targeted by the United States, and analysts say the smartphone has unique capabilities in China. He said that it is equipped with an advanced chip developed.
Li cited quantum computing and life sciences as fields that China would like to explore, in addition to launching science and technology programs to achieve strategic and industrial development goals, as well as expanding into big data, commercial spaceflight, and artificial intelligence. He vowed to strengthen his efforts.
Yinhe Military Science and Technology Minister told reporters on the sidelines of the National People's Congress that, as a guideline for its long-term strategy, China will focus heavily on developing human resources in science and technology.
He added that scientists under the age of 40 were leading more than 1,100 areas of major national research and development projects.
“Young people…are now an important force in our nation's efforts,” he said. “In the future, they will be the main force that makes China a scientific and technological powerhouse.”
(Reporting by Joe Cash and Yelin Mo in Beijing; Writing by Brenda Go; Editing by Clarence Fernandez)
