Foreign Investment Guide of the People's Republic of China
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THE PEOPLE'S REPUBLIC OF CHINA REPUBLIC OF CHINA THE PEOPLE'S OF GUIDE INVESTMENT FOREIGN FOREIGN INVESTMENT FOREIGN INVESTMENT GUIDE OF THE PEOPLE'S GUIDE OF THE PEOPLE'S REPUBLIC OF CHINA REPUBLIC OF CHINA 2020 Edition MINISTRY OF COMMERCE OF THE PEOPLE'S REPUBLIC OF CHINA 2020 PEOPLE'S REPUBLIC OF CHINA REPUBLIC PEOPLE'S OF THE OF COMMERCE MINISTRY MINISTRY OF COMMERCE OF THE PEOPLE'S REPUBLIC OF CHINA Foreign Investment Guide of the People's Republic of China 2020 Edition Ministry of Commerce of the People's Republic of China Foreign Investment Guide of the People's Republic of China (2020 Edition) Editorial Board Director: Wang Shouwen Members: Zong Changqing, Liu Dianxun, Yang Zhengwei Chu Shijia, Li Yongsha, Tang Wenhong Peng Gang, Jiang Wei, Wang Kaixuan Zhai Qian, Wang Xu, Sun Tong, Li Fei Editorial Staff: Zhu Bing, Li Yong, Wang Yi Wei Wei, Sun Lan, Zou Jingwen Kang Yiming, Ji Xiaoxu, Lu Qinhong Shi Chengjie, Wu Ming, Li Pengfei Zhang Huicong, Jiao Zheng, Liu Yujing Lu Hui Expert Panel: Qi Huan (Professor of China University of Political Science and Law, Doctoral Supervisor) Li Jiguang (Professor of University of International Business and Economics, Doctoral Supervisor) Guo Guixia (Professor of University of International Business and Economics, Doctoral Supervisor) Deng Huihui (Professor of University of International Business and Economics, Doctoral Supervisor) Lv Yue (Professor of University of International Business and Economics, Doctoral Supervisor) Zhao Zheng (Associate Research Fellow of Development Research Center of the State Council) Foreword In November 2019, President Xi Jinping stated in the keynote speech at the 2nd China International Import Expo that “China will continue to foster an enabling business environment that is based on market principles, governed by law, and up to international standards. We will give foreign investments greater market access to more sectors, shorten the negative list further, and improve institutions for investment promotion and protection and for information reporting.” In March 2020, at the national meeting for coordinating China’s epidemic control and economic and social development, President Xi stressed that “We must continue to optimize the business environment, successfully attracting, securing, and stabilizing businesses, and strengthen the confidence of foreign investors in long-term investment management.” In September 2020, at a national teleconference on deepening administrative reform and optimizing the business environment, Premier Li Keqiang expressed, “China should build a more sound and open environment to reassure foreign investors of its determination in opening up and how opening up policies are to bring them benefit.” China is committed to its national policy of opening up. The country’s opening to the outside world has continuously progressed, improved and made breakthroughs. China’s open economy indicators now rank among the best in the world. According to Doing Business 2020 released by the World Bank, China moved up to the 31st place in the “Ease of Doing Business” rankings — a jump of 15 spots from 2019. China will introduce high-level trade and investment liberalization and facilitation policies, fully enforce the system for “pre-establishment national treatment and negative list 01 management”, broaden the range and expand the scale of opening up on all fronts, relax restrictions on foreign investment in different fields including manufacturing, services and agriculture, protect the legal rights and interests of foreign investors, and create a level playing field in which domestic and foreign enterprises are treated equally and fair competition is encouraged, thus continuously enhancing China’s attractiveness to foreign investors. Since the beginning of this year, to effectively respond to the COVID-19 pandemic and stabilize the fundamentals of foreign trade and investment, China has introduced a range of policies to bail out enterprises facing difficulties and to offer tremendous support to market entities of all kinds, including enterprises with foreign investment, as they resume work. China, as a pathfinder for effective pandemic prevention and control across the world, has also been a frontrunner in resuming production and restoring normalcy. Meanwhile, China has put the new Foreign Investment Law and its Implementation Regulations into effect. It has released two revised negative lists, one for pilot free trade zones and one for the rest of the country. It has also established the Hainan Free Trade Port, added three new members (Beijing, Hunan and Anhui) to the group of pilot free trade zones, and relaxed control over market access to services such as finance. As the actual national use of foreign capital rises, bucking the trends, China has become a haven of transnational investment. To build a more transparent business environment and facilitate trade and investment, the Department of Foreign Investment Administration and Investment Promotion Agency, MOFCOM, co-compiled the Foreign Investment Guide of the People's Republic of China with the guidance of its editorial board. The guidelines, composed of five chapters — “Meeting China,” “Investing in China,” “The Legal System for Foreign Investment in China,” “Foreign Nationals in China” and “Procedures for Business Operation” — will be simultaneously released in English, Japanese and Korean, online and offline, to comprehensively introduce the international market-oriented and law-based business environment of China. It is hoped that the guidelines will be instructive for foreign enterprises and investors. This being its first compilation and release, it is bound to have some deficiencies. Your comments and suggestions will be much appreciated. These guidelines will be revised and improved regularly according to each year’s changes in regulations, policies and statistics. Editorial Board of the Foreign Investment Guide of the People's Republic of China November 2020 Contents 1. Meeting China ................................................................................................... 06 1.1 Country Overview ....................................................................................... 06 1.1.1 Natural Environment ......................................................................... 06 1.1.2 Society and Culture ............................................................................ 06 1.1.3 Basic Systems ..................................................................................... 07 1.2 The Economy .............................................................................................. 08 1.2.1 Economic Development ..................................................................... 08 1.2.2 Economic Structure ........................................................................... 08 1.2.3 Open Economy .................................................................................. 09 1.2.4 Market Potential ................................................................................ 10 1.3 National Strategy ........................................................................................ 10 1.3.1 Overall Strategy ................................................................................. 10 1.3.2 Regional Development Strategy ........................................................ 11 2. Investing in China .............................................................................................. 12 2.1 Infrastructure ............................................................................................. 12 2.1.1 Transportation Infrastructure Network ............................................. 12 2.1.2 Energy Supply .................................................................................... 13 2.1.3 Natural Resources .............................................................................. 13 2.1.4 Communication Infrastructure and Network Coverage ..................... 14 2.2 Innovation .................................................................................................. 14 2.2.1 Policies for Technological Innovation ................................................. 14 2.2.2 Scientific Research Input ................................................................... 15 2.2.3 Human Resources for Science & Technology Development .............. 15 2.2.4 Scientific Research Institutes ............................................................. 15 2.2.5 Scientific and Technological Innovation ............................................. 16 2.3 Human Resources ....................................................................................... 18 2.3.1 Human Resource Quality ................................................................... 18 2.3.2 Human Resource Services ................................................................. 18 2.3.3 Human Resource Services for Foreign Talent .................................... 18 2.4 Government Services via "Reform to Delegate Power, Streamline Administration, and Optimize Government Services" ................................ 19 2.4.1 Overview of Relevant Policies ........................................................... 19 03 2.4.2 Liberalization and Facilitation of Investment ..................................... 20 2.4.3 Measures for Business Environment Optimization ............................ 21 2.4.4 Practices for Business Environment Optimization ............................. 24 2.5 Professional Investment Promotion Service