Statement on State Council’s Opinions on Attracting and Optimising Foreign Investment Go back »

2023-08-14 | All chapters

Statement on State Council’s Opinions on Attracting and Optimising Foreign Investment

On 13th August, China’s State Council released the Opinions of the State Council on Further Optimising the Foreign Investment Environment and Increasing Efforts to Attract Foreign Investment (Opinions). The 24 points contained in the Opinions could go a long way to improving business confidence if they are implemented in a timely, coordinated and consistent manner. The publication of detailed implementation guidelines will be an extremely important part of this process.

In relation to Point 6 on government procurement, the announcement that foreign companies should be given fair access to procurement opportunities in China is welcomed. It is also positive that the State Council has announced that requirements for goods and services ‘produced in China’ be clarified, as it could prevent discretionary interpretation by local officials.

On Point 14, related tocross-border data flows, European companies are looking for reforms to China’s overly stringent data governance regulations in a way that can facilitate businesses’ transfer of data across borders for legitimate business purposes.

Point 19, on implementing preferential tax policies for foreign-invested enterprises, could have an immediate impact on business confidence. However, an urgent clarification from relevant implementing authorities on whether there will be an extension of China’s policy of non-taxable allowances for foreign employees beyond the 31st December 2023 expiry date is needed, as companies are already planning their human resources for 2024. An extension of this policy would demonstrate a firm commitment to the foreign business community, as well as domestic firms that hire foreign nationals, and would help to stem the outflow of foreign talent that has taken place over the last three years.

For more information please contact

Xinhe Fan