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China vows to treat foreign firms equally amid industrial upgrade push


China vows to treat foreign firms equally amid industrial upgrade push By Reuters

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Published Mar 24, 2024 09:33PM ET
Updated Mar 25, 2024 02:35AM ET

© Reuters. A man walks in front of the skyline of the Central Business district in Beijing, China, July 14, 2022. REUTERS/Thomas Peter/File Photo

By Liangping Gao, Ryan Woo and Jing Xu

BEIJING (Reuters) -China pledged on Monday to treat foreign companies the same way as domestic peers in a bid to attract more foreign investment, cooperation and expertise, as Asia’s largest economy moves to upgrade and strengthen its industrial chains.

“China will fully guarantee national treatment for foreign companies, so that more foreign companies can invest in China with confidence and peace of mind,” Vice Commerce Minister Guo Tingting said at the China Development Forum in Beijing.

Guo did not give details about how China would guarantee “national treatment”, or the equal treatment of locals and foreigners as per World Trade Organization (WTO) principles.

For years, Western firms have complained of unequal access in China, a vast consumer market and also global supplier of raw materials and components. Western governments have expressed concern about “economic coercion”, and companies have considered “de-risking” supply chains and operations away from China.

China’s introduction of a broader anti-espionage law, exit bans and raids on consultancies and due diligence firms have further chilled foreign fund inflows. Inbound foreign direct investment contracted 8% last year.

Geopolitical tension, most prominently with the United States on a range of issues including U.S. concern that U.S. chips and AI technology could be used to boost Chinese military capabilities, has also weighed on investor sentiment.

In response, China has stepped up efforts to address concerns of foreign investors, pledging to protect the rights of foreign companies and promising to further enlarge entry into its markets.

China will continue to open up high-level areas of industry and finance and create more market opportunities, and will firmly safeguard a multilateral trading system with the WTO at its core, Guo said.

Premier Li Qiang on Sunday said China will continue efforts to build a first-class business environment and to welcome enterprises from all over the world to invest in the country.

Stephen von Schuckmann, a board member and executive at ZF Group who oversees the auto supplier’s battery-drive operations, has said the company was committed to China, which leads the world in electric vehicle sales and production.

“Any wording and hype about an exodus in the supply chain is not what we follow,” he said in remarks published by CGTN. “We’re invested. We’re here to stay.”

Over 100 overseas executives and investors have attended the annual China Development Forum since the weekend, including companies with deep supply chains in China such as Apple (NASDAQ:AAPL) and Siemens.

China will fully lift restrictions on foreign investment access to its manufacturing sector and deepen in-depth cooperation with firms from all countries, Minister of Industry and Information Technology Jin Zhuanglong said at the forum on Monday.

To strengthen the self-reliance of its industrial sector – amid U.S.-led curbs on high-tech exports to China – the world’s second-largest economy has vowed to upgrade its manufacturing supply chains through innovation, and also through the expertise of foreign companies.

“China will vigorously promote the deep integration of scientific and technological innovation and industrial innovation, and encourage foreign-invested enterprises to set up R&D centres,” said Jin.

Earlier this month, China announced an economic growth goal of around 5% for this year and promised to transform the country’s development model to offset drag from a prolonged property crisis, high local government debt and weak consumer demand.

“China faces a fork in the road: rely on the policies that have worked in the past, or reinvent itself for a new era of high-quality growth,” the International Monetary Fund’s Managing Director Kristalina Georgieva said on Sunday.

China vows to treat foreign firms equally amid industrial upgrade push

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