China announces latest easing of foreign investment rules
- The latest measures will see an opening up of the tourism and elderly care sectors in three major cities and the province of Hainan
- The moves are part of a pilot scheme announced in April 2021 that covered 12 service industries
The announcement comes amid growing concern from foreign investors about the country’s ongoing Covid-19 restrictions, data security and the politicisation of economic matters, on top of long-standing concerns about market barriers and an uneven playing field.
The measures are part of a pilot project that will run until April 2024 and affect companies in Chongqing, Shanghai and Tianjin, as well as the island province of Hainan.
They form part of a wider plan announced in April 2021 to relax the rules on foreign investment for three years. It contained 203 pilot projects and covered 12 key service industries, including technological services, financial services, healthcare, education and e-commerce.
The State Council asked relevant departments to make adjustments and to establish a management system that helps to expand and open up the service industry.
The latest details of the plan indicate that market access will be relaxed for private entities funded by foreign donors running non-profit nursing homes for the elderly in Tianjin, Chongqing and Hainan.
Qualified foreign-invested travel agencies in Shanghai and Chongqing will also be allowed to offer overseas tours, excluding Taiwan.
The importance of the latest measures for China’s domestic market and in showing the country’s open stance should not be underestimated, according to Zhao Xijun, a Renmin University finance professor specialising in foreign trade and investment.
