China to reduce curbs on foreign investment

13 Jan 2019 / 22:57 H.

SHANGHAI/BEIJING: China will reduce restrictions on foreign investment and address difficulties facing foreign companies investing in the country, the commerce minister said, according to a transcript of an interview he gave to state media.

Commerce Minister Zhong Shan said China would allow full foreign ownership of companies in more areas of the economy and would reduce the number of industries in which foreign investment was restricted or barred, according to the transcript posted on the Ministry of Commerce’s website today.

The comments appeared to be largely reiterations of past pledges by Chinese officials for further market opening.

Foreign direct investment (FDI) into China rose by 3% year on year to US$135 billion (RM554.8 billion)in 2018, Zhong said.

That would mark a slowdown from growth of 7.9% in 2017 and 4.1% in 2016.

But Zhong said China had maintained stable FDI growth “against a gloomy global climate,“ noting that total FDI around the world had slumped by 41% in the first half of last year.

China has been pushing to broaden opportunities for private firms and foreign investors to stimulate an economy that is slowing on the back of weakening domestic demand and a trade war with the US.

Zhong said "properly handling" trade frictions with the United States was a major task for the ministry in 2019.

The ministry would "conscientiously implement" the consensus to work toward a resolution of the trade row reached by Chinese President Xi Jinping and US counterpart Donald Trump in Argentina late last year, he added.

The two sides held three days of trade talks at a vice-ministerial level in Beijing last week.

Zhong said the Commerce Ministry would push for the introduction of a foreign investment law as soon as possible, improve the handling of complaints from foreign firms, and encourage foreign investment in manufacturing and high tech.

The ministry would also encourage foreigners to invest in central and western China, he said.

Separately, the official Xinhua news agency reported today, citing the country's human resources ministry, that China will roll out a series of measures to maintain stable employment this year.

China is grappling with the impact of a slowing economy amid a damaging trade dispute with the US, its largest trading partner, and sources have said it plans to set a lower economic growth target of 6.0% to 6.5% in 2019, compared with "around" 6.5% in 2018.

In order to ensure employment, the Chinese government will reduce the burden on companies, officials from the Ministry of Human Resources and Social Security said, according to Xinhua, adding that research on plans to cut their social insurance premium rate would be accelerated.

"Enterprises with fewer or zero layoffs can take half of the previous year's unemployment insurance premium back," Xinhua quoted an unnamed senior ministry official as saying, reiterating a policy that was flagged by the State Council, China's cabinet, in December.

Xinhua said China's urban unemployment rate was 3.8% by the end of 2018, with 13.61 million new jobs created in urban areas last year, up 100,000 from 2017.

In comments published on Saturday, Chinese Premier Li Keqiang said planned tax cuts targeting smaller companies would help support employment and economic stability.

"For 2019, China still faces large employment pressure, with more than 15 million newly-added job-seekers in urban areas, including a record number of 8.34 million college graduates expected," the human resources ministry official added.

College graduates, migrant rural workers and veterans should be given targeted assistance in finding jobs, the official said, adding that more skills training channels should be opened for the unemployed.

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