In an era where global economic integration is a key driver of growth and prosperity, countries around the world are vying to create business-friendly environments that attract foreign investment and global talent. China, as one of the world’s economic powerhouses, is no exception to this trend. Recent efforts by the Chinese government to improve the business climate for foreign businesses have been met with positive feedback from officials and experts, who believe these measures will facilitate China’s deeper integration into the global economy.
The State Council’s policy document, published on June 29, outlines steps to deepen reforms in several free trade zones and the Hainan Free Trade Port, with the aim of boosting institutional opening up. These free trade zones, located in Shanghai, Guangdong, Tianjin, Fujian, Beijing, and Hainan, serve as pilot areas for testing new economic policies before they are implemented on a broader scale.
One of the notable measures introduced in the policy document is the facilitation of entry and residency for company executives and their family members. Previously, relocating executives to foreign-invested businesses in China often came with complex bureaucratic hurdles for their families. Now, spouses and family members of these executives will enjoy similar entry and residency periods as the executives themselves. Additionally, process for obtaining residence permit will be streamlined. This move is intended to make China a more attractive destination for global talent, as it allows executives to bring their families with them, providing a more stable and conducive environment for them to contribute to China’s economic growth.
Furthermore, foreign executives planning to establish new subsidiaries in the pilot regions will be granted a maximum period of two years’ residency. By extending the period of stay for these executives, China aims to entice foreign investment into its growing markets. The Chinese government recognizes the value that foreign expertise and innovative practices can bring to its economy and is eager to foster high-quality growth through their contribution.
According to data from the Ministry of Commerce, foreign direct investment on the Chinese mainland experienced a slight decline of 2.7 percent year-on-year in the first half of the year, amounting to 703.65 billion yuan ($97.47 billion). However, during the same period, there was a noteworthy increase of 35.7 percent in the number of new foreign-backed businesses established. These figures indicate that while foreign investment might have faced some challenges, there is a growing interest among foreign businesses to set up operations in China.
Andy Mok, a senior research fellow at the Center for China and Globalization, views these recent moves by China as strategic and ambitious. He believes that easing entry and residency rules for foreign executives and their families signifies China’s commitment to deeper integration into the global economy. It also showcases China’s determination to stimulate high-quality growth through the influx of foreign expertise and innovation.
Beyond facilitating the entry of executives and their families, the policy document also includes other crucial measures to promote a more conducive business environment in the pilot areas. Notably, it ensures that Chinese and foreign financial institutions have the same access when new services are greenlit by authorities. This fosters a level playing field and encourages foreign financial institutions to participate in China’s rapidly evolving financial markets.
Moreover, the policy allows individuals and businesses to purchase financial services from overseas and permits the legal investments of foreign investors to be transferred in and out of China freely and without delay. These measures promote financial openness, making it easier for foreign investors to operate in the Chinese market and reducing barriers to capital flows.
China’s recent efforts to improve the business climate for foreign businesses, particularly in the pilot free trade zones and the Hainan Free Trade Port, indicate its objective to deepen its integration into the global economy. Through facilitating the entry of company executives and their families and implementing other key measures to attract foreign investment, China aims to become a more appealing destination for global talent and capital.
As China continues to open up its economy and embrace foreign expertise and innovation, it is poised to foster high-quality economic growth and cement its position as a significant player in the global marketplace.
This publication is part of China Insights by Media Scope Group, a source of reliable information on China, its economy, society and culture. Explore more insights or get in touch with our experts to get more detailed information.
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