This article was written by Andrew Fei.
From broadening market access and strengthening IP protection rights, to creating a more attractive environment for foreign and domestic businesses and expanding imports, Chinese President Xi Jinping has announced a "new phase of opening up" in China at the 2018 Boao Forum for Asia.
The 2018 Boao Forum for Asia marks the 40th anniversary of reform and opening up in China (改革开放), and the beginning of the implementation of the decisions made at China's 19th National Congress.
New phase of opening up for China's economy
In his keynote speech, the President of the People's Republic of China remarked that China's economic development over the past 40 years was made possible due to, among other things, the incremental opening up of the economy. President Xi Jinping stated that China will enter into a "new phase of opening up" and outlined a number of key reform measures for the world's second largest economy, while noting that China has every intention of increasing the pace of implementation and translating these reforms into reality sooner rather than later.
The reforms outlined in President Xi Jinping's speech (a number of which have been flagged earlier) will deliver significant changes and, with them, many opportunities, to local and international businesses operating in China and around the world.
Should you wish to discuss what these reforms mean for you or your business, please contact a member of our cross-border team. In the meantime, we have set out some of the key reforms outlined in President Xi Jinping's speech.
Significantly broaden market access
In 2018, China will look to launch several landmark initiatives to further open up its economy, including:
- Relaxing the restrictions on the establishment of foreign-invested financial institutions and broadening the scope of their business activities in China. In this respect, China has already announced major measures to ease foreign investment restrictions in the banking, securities and insurance sectors.
- Broadening the cooperation between Chinese and foreign financial markets.
- Further easing the restrictions on foreign shareholdings, especially in the automobile industry. President Xi Jinping noted that China's manufacturing industry is basically already open, although some restrictions remain in specific sectors such as automobiles, ships and aircrafts.
Create a more attractive environment for foreign investments
- In the first half of 2018, China will complete revisions to the "negative list" of foreign investments and fully implement the pre-entry national treatment plus negative list management regimes.
- To create a more attractive environment for businesses, China will:
- become more aligned with international economic and trade principles;
- increase transparency;
- further strengthen the protection of property rights;
- address matters according to law; and
- encourage competition while opposing monopolies.
Strengthen intellectual property rights protection
- President Xi Jinping stated that strengthening IP protection is the most important aspect of enhancing property rights protection in China, which in turn will increase China's economic competitiveness.
- He encouraged Chinese and foreign companies to carry out technology-related exchanges and cooperation, and stated that China will protect the legitimate intellectual property rights of foreign enterprises in China.
- In 2018, China will also reorganise the State Intellectual Property Office to enhance law enforcement, increase the penalties imposed on illegal activities, and fully realise the deterrence effect of the law.
President Xi Jinping remarked that domestic demand is the fundamental driving force for China's economic development, and is essential for meeting the Chinese people's ever-growing needs for a better life. He stated that:
- China does not aim at pursuing a trade surplus and hopes to expand imports and promote current account balances.
- In 2018, China will considerably reduce import tariffs on automobiles and certain other products.
- China will accelerate the process of joining the World Trade Organisation's "Government Procurement Agreement".
- In November 2018, China will hold the first China International Import Expo in Shanghai.