China’s State Council on Foreign Investments

China’s State Council on Foreign Investments

31/08/17

Melanie Ullrich, Business and Policy Programme Manager

On 16 August, China’s State Council officially released Circular No. 39, titled ‘Notice of the State Council on Several Measures of Promoting Foreign Investment Growth’. The circular urges the government to build a legal, international and convenient environment for foreign businesses, with a focus on further lifting limitations on foreign capital; formulating supportive policies on finance and taxation; comprehensively improving the investment environment of National Development Zones; facilitating entry and exit of talent; as well as optimizing the business environment.

Circular No. 39 consists of 22 measures, including ensuring repatriation of profits for foreign investors, further expanding the scope of market access, and encouraging multinationals to invest and establish their regional headquarters in China. The latter one aims to increase the competition with Singapore and Hong Kong. Both locations are well established for regional headquarters thanks to their longstanding favorable regulatory environments that are designed to attract companies. However, Shanghai has caught up remarkably: By the end of 2016, almost 580 multinationals have set up their regional headquarters in the city, according to China Daily.