Parts Of Chinese Economy To Be Opened Up Further To Foreign Investment

More parts of its huge economy and market would be further opened up to foreign investment, China has said.

Restrictions in multiple sectors such as railways, shipping and power grids would be loosed or removed, announced the Chinese government late on Thursday.

The government had already announced changes in some of the sectors like the automobile and financial sectors. But the latest measures were described as “positive” by one advocacy group for US businesses in China.

“Removing some investment barriers in the railway, shipping, and power sectors … shows that China is attempting to show it is indeed opening up,” said William Zarit, chairman of the American Chamber of Commerce in China.

There have been criticisms against China of shutting out foreign companies from some of the larger sections of its economy. Chinese leaders have however maintained the country’s intent of opening up of more areas of its economy in a gradual manner.

During the escalating trade clash between the US and China, one of the allegations that Trump had made against China was the limited market access for foreign companies.

But analysts say that the latest moves by China should not be viewed to be direct reaction to the demands being made by the US.

“I think they would very much like it to be seen as China opening up to the rest of the whole world rather than something that is done to assuage the Trump team,” said Louis Kuijs, head of Asia Economics at research firm Oxford Economics.

Earlier, the country’s authorities had announced that by the end of June, the government would reduce the number of sectors in its economy where foreign companies are not allowed.

“It is delivering on promises and plans that had been announced before,” Kuijs said.

However, dozens of sectors, such as the media, internet and agriculture, would still be out of bounds for foreign companies and tight restrictions on foreign involvement by foreign companies would be maintained by Beijing.

There have also been allegations by foreign companies in China about a number of other challenges in conducting operations in the market which include inconsistent implementation of regulations and domestic companies being favored.

The decision from China follows on heels of a decision by the Trump administration of not imposing outright limits on investments from China in the country.

Last month, there were signals from the White House about the possibility of measures to prevent investments from China in “industrially significant technology” in response to allegations by US companies about American intellectual property theft by Chinese companies.

The Trump administration announced on Wednesday that it would depend on the Congress to further tighten on the existing government agencies which is in-charge of evaluating individual corporate deals from the angle of risks to national security.

The developments in Washington were being closely monitored and an assessment was being made about the potential impact on Chinese companies, said the Chinese government.

Such moves would “help to defuse trade frictions with open market-based economies that feel China continues to take advantage of their openness while keeping its own markets relatively closed,” said Zarit of the American Chamber of Commerce.

(Adapted from Money.CNN.com)

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Categories: Economy & Finance, Uncategorized

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