China to Unify Investment Laws and Accelerate Customs Reform

On 17 September, the State Council issued Several Opinions on Establishing a New Open-Economy System. The Opinions clearly state that China will participate fully in the reform of international economic system and formulation of related regulations, and will take initiatives to put forward new ideas, new proposals and new action plans regarding global issues in a move to strengthen its right to speak on the formulation of international economic and trade regulations and standards.

Foreign investment: Unifying laws and regulations on domestic and foreign investments

On revamping the foreign investment regime, the Opinions set out lines to take in four areas: unifying laws and regulations governing domestic and foreign investments; introducing the “pre-establishment national treatment plus negative list” management model; improving the foreign investment supervision system; and advancing the transformation, upgrade and innovative development of development zones.

According to the Opinions, on the basis of implementing sound risk assessment, efforts will be made to relax market access restrictions on foreign investment in the service sector on different levels and in different key areas; advance the orderly liberalisation of service sectors including finance, education, culture and medical care; relax market access restrictions on foreign investment in such service sectors as child and elderly care, architecture and design, accounting and auditing, commerce and logistics, as well as e-commerce; and further liberalise general manufacturing.

Trade facilitation: Expedite customs clearance integration reform

Where raising the level of trade facilitation is concerned, the Opinions point out that action will be taken to strengthen coordination mechanism for the so-called big customs clearance, accelerate the building of a “single window” for international trade, expedite customs clearance integration reform, as well as coordinate and standardise import and export related operational services and charges.

The Opinions also put forward that a sound system for promoting trade in services will be established. It is proposed that action will be taken to expand the scale of trade in services; encourage transformation of the service sector by applying new technologies such as big data, Internet of Things, and mobile Internet; build a service sector standardisation system aligned with international standards; and promote the upgrading of service outsourcing.

“Going out” strategy: Outbound investment to exceed inbound

According to the Opinions, China will endorse and implement the “going out” strategy in the new era. Based on the country’s overall plan for national economic and social development and the overall strategy for opening up to the outside world, steps will be taken to improve the medium to long-term development plan for outbound investment, strengthen coordinated planning and guidance for “going out”, and provide policy support and implement investment promotion measures. With regard to innovation in the formats for cooperation in outbound investment, the Opinions state clearly that enterprises and individuals are allowed to take advantage of their strengths to carry out investment cooperation offshore. They are also allowed to go to different countries and regions at their own risk to undertake engineering and labour cooperation projects, and to go out and conduct greenfield investment, M&A investment, securities investment and joint investment in innovative ways.

The Opinions encourage enterprises with sufficient capability to conduct offshore investment in infrastructure and cooperation in energy resources by adopting multiple ways. Efforts will be made to encourage priority industries including high-speed rail, nuclear power, aviation, machine building, power, telecommunications, metallurgy, building materials, light industry and textiles to go global. Steps will also be taken to raise the level of internationalisation of such modern services as Internet information service, and to mobilise the e-commerce sector to go out.

International economic cooperation: Establish high-standard free trade zone network

The Opinions state that the rules of the global trading system must be upheld. Efforts will be made to maintain the leading position of multi-lateral trade system in global investment and trade liberalisation; uphold the principles of balanced development, generalised preferences and win-win; and fight trade and investment protectionism.

Meanwhile, a high-standard free trade zone network is to be set up. Efforts will be made to quicken the pace of implementing the free trade zone strategy, uphold the practice of introducing different policies in different types of zones, and gradually form a high-standard free trade zone network building on neighbouring regions, covering the Belt and Road, and embracing the world. Steps will also be taken to proactively liberalise the service sector further; expedite the pace of conducting negotiations on such new issues as environmental protection, investment protection, government procurement, and e-commerce; and positively promote innovative cooperation on an international level.