Premier Li Keqiang delivers a keynote speech at the opening ceremony of the Boao Forum for Asia on Thursday. [Photo by Wu Zhiyi/chinadaily.com.cn]
Foreign investors eyeing the Chinese market yet worried about the possible legal and policy restraints they might encounter in the country can draw comfort from the message that emanated from Boao, a coastal town in Hainan province, on Thursday.
In his keynote speech at the annual conference of Boao Forum for Asia, Premier Li Keqiang said China is more than determined to further open up its economy, including its financial market, in the new era, and provided a timeline for some specific measures to be adopted to improve the business environment to attract more foreign capital.
True to the spirit of the forum of promoting economic integration and closer cooperation, foreign banks, and securities and insurance companies stand to benefit as China lowers its market access threshold and lifts the restrictions on the foreign ownership of such institutions. These moves are aimed at improving the allocation of resources, which in turn will boost the real economy in a country with the world's second-largest stock market, and third-largest bond and insurance markets.
In line with the forum's theme of "Shared Future, Concerted Action, Common Development", Li said China will revise its negative list for foreign investment, and issue the updated list by the end of June, as giving foreign enterprises greater access to China's market will lead to concerted action and common development.
Given the government's promise to better protect foreign businesses' legal rights, and to ensure foreign investors and enterprises are treated on a par with their Chinese counterparts in all sectors except those on the negative list, China's top legislature passed the Foreign Investment Law earlier this month.
The government is busy formulating supporting regulations and rules to ensure the smooth implementation of the Foreign Investment Law that will take effect on Jan 1, 2020, which is another example of the government using further opening-up to create a level playing field for foreign and domestic enterprises.
That the total assets of foreign-funded banks accounted for only 1.32 percent of China's banking industry by the end of 2017, compared with about 10 percent in many developed countries, shows there is ample room for further opening-up to better serve foreign investors. This is a task that must be fulfilled because foreign-funded companies account for nearly half of China's foreign trade, a quarter of its industrial output, and one-seventh of its urban employment.
Also, to promote emerging industries, upgrade traditional industries and realize innovation-driven development, China needs to attract more foreign capital and enterprises, for which it has to quicken the pace of opening-up by embracing foreign investment in a more active and comprehensive manner. And, as Li's speech showed, China is confident of fulfilling this formidable task.
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