China’s FDI Measures:
Progress Monitoring
Tracking China’s efforts to boost foreign direct investment and improve conditions for foreign-invested enterprises.
Background
Since the pandemic, China has introduced measures to boost foreign direct investment (FDI) after levels hit a record low in 2023 during the Zero-Covid regime. These new measures aim to reverse this negative trend by creating an attractive landscape for foreign-invested enterprises (FIEs) through fiscal incentives, equal treatment, and IP protection.
Politically, the central government hopes to present China in a more conciliatory light amidst growing geopolitical tensions.
DI Sense China’s Monitoring
DI Sense China is closely monitoring the implementation of these measures. The focus is on whether the central government is honoring its promises and if local governments are capable of providing the required support. The organization keeps member companies updated about important developments and encourages them to share their own experiences.
Incentives
Offering FIEs new investment opportunities
Conditions
Improving the investment climate for FIEs
Priorities
Streamlining the government’s own efforts
Incentives
The Chinese government has introduced two key incentives to attract and retain foreign investment:
Goverment Procurement
Ensure that FIEs can participate in China’s government procurement process under the same terms as local competitors.
Reinvestment
Incentivize FIEs to reinvest within China, applying relevant tax benefits to support their growth in sectors encouraged by the state.
Conditions
Investor protection
Goal: Enhance mechanisms to protect the rights and interests of FIEs.
IP protection
Goal: Enforce stronger legal protection of intellectual property rights, increase enforcement to safeguard innovations by FIEs.
Regulatory transparency
Goal: Ensure that regulations affecting FIEs are formulated transparently and consistently.
Data compliance
Goal: Explore mechanisms to safely manage cross-border data flows, improve the coordination of law enforcement inspections for FIEs.
Administrative Compliance
Goal: Refine administrative procedures for FIEs to provide better support.
National standardization
Goal: Support FIEs in formulating industry standards, ensuring they can benefit from supportive policies alongside domestic firms.
Expatriate support
Goal: Optimize residence conditions for foreign expats in FIEs.
Priorities
Targeted sector investment
Attract more priority investments by liberalizing the service industry and leveraging pilot zones.
New investment streams
Explore new ways to benefit from foreign capital by encouraging relocation and expansion of FIEs across different regions in China.
Stronger investment promotion
Improve mechanisms and financial remedies for attracting foreign investments.
Broader investment promotion
Develop new channels for foreign investment promotion via performance evaluation and higher efficiency.