|
China will relax rules for foreign investment, increasing its market
appeal to global investors and signaling its determination to deepen
opening up. The country's Ministry of Commerce (MOC) has made public its plan for
formulating regulations and laws in 2021, putting on agenda the
revision of the guideline on foreign strategic investment in Chinese
listed firms. The revision seeks to "ease restrictions on foreign strategic
investment, and introduce innovative supervision approaches for the
sector," the MOC said in a recent online statement. The move came as the guideline, which was issued 15 years ago, cannot
satisfy the current demand of foreign investment attraction given the
country's rapid development over the years. Wang Jian, a professor at the University of International Business
and Economics, said the revision was a signal to the world, indicating
that China will continue its reform and opening-up policy, gradually
loosen restrictions on foreign investment in listed firms, and foster a
more enabling investment environment. As the market is waiting for the upgraded guideline, a draft revision
unveiled last June offered a glimpse of the upcoming rules. The June draft lowered asset requirements for investments. It
stipulated that foreign investors should either own at least 50 million
U.S. dollars or manage no less than 300 million dollars of assets for
market entry, compared with the current thresholds set at 100 million
dollars and 500 million dollars, respectively. It also reduced the lock-up period for foreign shareholders' stocks
from three years to 12 months and removed shareholding limits of foreign
strategic investment through listed firms' targeted placements. Commenting on the lowered bar for foreign investment, Wang said it
meant that apart from productive investment, China also welcomes foreign
strategic investment in listed firms with open arms. "The changes showed that China is gradually opening its equity market
to the world, which is also conducive to the sound and healthy
development of its stock market," Wang noted. Opening up has been frequently brought up by China's policymakers
over the years of its rapid economic growth. Despite a virus-induced
economic slowdown across the world, the country's opening-up momentum
remains unabated. China has taken several major steps to open its door wider since last
year: implementing the Foreign Investment Law, trimming the negative
list for foreign investment and easing foreign access to the financial
market. In the country's new development blueprint, the 14th Five-Year Plan,
it reiterates the commitment to promoting reform and opening up while
pursuing high-quality development. With a 4-percent growth in foreign direct investment (FDI) inflows
last year, China stood out as the largest recipient of FDI in the world,
according to a report from the United Nations Conference on Trade and
Development. In the first four months of 2021, FDI into the Chinese mainland, in
actual use, surged by 38.6 percent year on year, MOC data showed.
| 
Related News
