Beijing enacts regulations to optimize foreign investment environment – Xinhua

BEIJING, May 31 (Xinhua) — Beijing adopted its first special regulation on foreign investment on Friday, marking the Chinese capital’s latest effort to further open up and become more attractive to global investors.

The ordinance was adopted on Friday at the 10th session of the Standing Committee of the 16th Beijing Municipal People’s Congress, the local legislature. It is to enter into force on July 1.

Key elements of this regulation include efforts to promote secure and orderly cross-border data flows. Additionally, Beijing’s municipal governments at all levels are required to honor promises made regarding foreign investment, and the regulation outlines consequences for violating such commitments.

While some U.S. politicians are busy building an “opposition wall” and prattling on about the need to “decouple” and “de-risk” China, Beijing, along with other major Chinese investment centers such as Shanghai and Shenzhen, are introducing measures to share with world with its development opportunities.

As one of the first international pharmaceutical companies to enter the Chinese market, French pharmaceutical giant Sanofi established its first office in China in 1982. Over the decades, it expanded its presence to more than 2,000 counties and cities across the country.

In response to the cross-border data flow challenges faced by multinational companies, local authorities in Beijing conducted extensive consultations with companies, including Sanofi, before introducing the new regulation. The regulation aims to promote secure and orderly cross-border data flows by formulating lists of general data and lists of important data in a pilot free trade zone.

“The introduction of the regulation was timely and met with a positive response from foreign companies,” said Helen Zhu, vice president of Sanofi Greater China. “I am glad that our proposal was accepted.”

Another great example is Deloitte, a well-known international accounting firm.

“There is a legal basis for resolving disputes, which reassures us,” said Tracy Ma, managing partner of government affairs at Deloitte China Northern Region, reacting to the new regulation.

Over the past decade, Deloitte has made significant progress in China. Buoyed by confidence in Beijing’s improved business environment, Deloitte plans to expand its investments in the city, according to Ma. The company’s goal is to double revenue and increase employment to 10,000 employees in the next three to five years.

“If companies want to develop, they should invest where there is a market. It is not geopolitics that can cut it off. China’s big market is visible to everyone,” Ma said. “China is a blue ocean market that no foreign company wants to give up.”

According to Ren Peiwen, an official of the Beijing Parliament, the regulation is based on China’s Overseas Investment Law that came into force in 2020, but is more targeted, service-oriented and coordinated.

The regulation includes a dedicated chapter on foreign investment services, detailing a number of measures such as the recognition of professional qualifications acquired abroad, independent assessment of professional skills levels, and regular consultations between local governments and foreign companies.

“The inclusion of a service package policy in the regulation ensures that this type of service will continue to be provided in accordance with the law,” Ren said.

“This legislation can ensure a sustainable competitive business environment. It is expected to take Beijing’s open economy to the next level,” said Kong Qingjiang, dean of the School of International Law at China University of Political Science and Law.

Zhu was impressed by the significant improvement in local governments’ service awareness towards businesses in recent years. “Not only do we take our feedback into account every time, but we also regularly review how issues have been resolved,” she said.

According to the British Chamber of Commerce in China, in a study involving over 300 British companies in China, over 80 percent expressed its desire to remain on the Chinese market due to its scale and potential. This percentage represents a significant increase compared to last year’s survey.

“Increased consultation and implementation by the Chinese government will increase foreign companies’ understanding of the foreign investment environment in China, which will greatly impact their confidence in the Chinese market,” said Rachel Tsang, managing director of the British Chamber of Commerce in China.

“We see regulations encouraging foreign companies to establish their headquarters in Beijing and even move from subsidiaries to Asian regional offices,” Tsang added.

Thanks to emerging industries and dynamic scientific innovations, Beijing has become an attractive place for foreign investment. Official data show that the capital’s actually used foreign direct investment in 2016–2020 amounted to USD 79.6 billion, which is over 11.8%. the entire country.

It is worth noting that last year, 1,729 foreign-financed enterprises were newly established in Beijing, an increase of 22.8%. compared to 2022. At the end of March 2024, the number of regional headquarters of international corporations in the capital reached 244. ■