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China unveils easing of investment curbs as trade war looms
BEIJING, June 29, 2018 (BSS/AFP) – China has announced sectors of the
economy where it will ease foreign investment rules, with leaders stepping up
efforts to portray the country as opening up as they prepare for a possible
trade war with the United States.
The new “negative list” outlines key reforms in the financial sector while
dropping restrictions in areas including the car industry, agriculture,
infrastructure and mining.
The list released Thursday by the National Development and Reform
Commission (NDRC), which will come into effect on July 28, will reduce the
number of fields with limits from to 48, from 63 last year.
But it also notes some sensitive areas such as culture and national
security will continue to be protected.
The announcement comes after the government unveiled changes earlier this
year, which were seen as a nod to the United States and other western nations
that have complained about lack of access to the world’s number two economy
for years.
Among them are the cancellation of foreign shareholding caps for banks and
allowing 51 percent control in some other financial fields for three years,
after which restrictions will be scrapped.
However, critics say the policy comes with other limits that make only the
largest foreign banks eligible for entry.
The list also removes curbs on petrol station ownership, cereal trading,
and electricity infrastructure, while also easing restrictions in the auto,
aircraft and ship-building industries.
The announcement comes as the world’s two largest economies prepare next
week to slap the first batch of new border taxes on tens of billions of
dollars in goods from both countries, fanning fears of a potentially damaging
trade war.
Facing outside protectionism, China must “make greater efforts to promote
openness, promote reform, promote development, promote innovation through
openness, and promote the further development of economic globalisation”, the
commission said in a statement.
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“Investment cooperation between China and other countries and regions will
be deepen further, with more extensive exchanges of capital, technology,
management, and talents carried out.”
Beijing’s rhetoric is in sharp contrast to Washington, where officials
have been considering ways to limit Chinese investment and even the flow of
some Chinese nationals to US universities.
Beijing has been keen to portray itself as the wronged party, repeatedly
saying it does not want a trade war but will hit back with equal strength if
forced into a corner.
Officials also released a white paper Thursday mounting a full-throated
defence of its pledged reforms and promises since joining the World Trade
Organization in 2001.
“China has steadfastly carried out every promise made upon entering the
World Trade Organization,” vice commerce minister Wang Shouwen said when
introducing the report, and challenged countries that don’t agree to “sue us
at the WTO”.
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