Saturday, 7 Dec 2019

China assures foreign companies amid Sino-US trade tensions

BEIJING (CHINA DAILY/ASIA NEWS DAILY) – There is no massive withdrawal of foreign investment from China, said the Ministry of Commerce, and the country will firmly protect the legitimate rights and interests of foreign enterprises in China.

“We’ve noticed the concerns of some foreign enterprises, but based on our knowledge the country has not seen large-scale withdrawal of investment by foreign companies,” said ministry spokesman Gao Feng at a news briefing on Thursday (July 11).

His remark came amid media reports that said some foreign companies are considering moving out of China to avoid being adversely affected by the ongoing Sino-US trade conflict.

“China will not suppress any foreign-funded enterprises and will not discriminate against any of them,” Mr Gao said.

“We will resolutely protect the legitimate rights and interests of all foreign-funded enterprises in China and create a more stable, fair, transparent and predictable investment environment for them.”

Despite the uncertainties created by the Sino-US trade dispute, China remains one of the hottest destinations for foreign direct investment, the ministry said.

China ranked the world’s second-largest recipient of foreign direct investment (FDI) after the United States, accounting for more than 10 per cent of total global FDI, according to World Investment Report 2019 published by the United Nations Conference on Trade and Development.

In the first half of this year, FDI into the Chinese mainland climbed 7.2 per cent year-on-year to 478.33 billion yuan (S$94.50 billion).

The country’s Foreign Investment Law will come into force in the beginning of next year. Two new negative lists, which were shortened to promote greater economic opening-up, will take effect from July 30.

Looking ahead, Mr Gao said the government will continue to open up the market, promote investment liberalisation and facilitation and ensure the market remains an attractive destination for foreign investment.

Mr Marcel Smits, head of corporate strategy at US agri-business giant Cargill, said: “China’s business environment continues to improve, and government policy is sending favourable signals, including the recent Foreign Investment Law.”

The agricultural conglomerate invested US$200 million (S$272 million) in China to build new plants and research facilities in different provinces in the first half of this year.

Asked about whether China plans to purchase agricultural products from the US, Mr Gao of the Commerce Ministry said China and the US complement each other in the agricultural products trade, and there is huge room for cooperation.

Academic Wang Xiaosong, a professor of international trade at Renmin University of China’s School of Economics, said negotiating teams of both countries need to attach great importance to their future high-level economic and trade talks.

“The talks should be based on equality and mutual respect, and the two sides need to further align their interests,” Prof Wang said.

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