Kyodo News:
My question is about foreign investment. Some foreign-funded companies are worried that certain policies, such as the export control law, may impose restrictions or obstacles on their investment in China. How can you make foreign-funded companies reassured about their investment in China during the 14th Five-Year Plan period?
Ning Jizhe:
China's paid-in foreign direct investment (FDI) bucked the trend last year despite a sharp contraction in global cross-border direct investment. In 2020, nonfinancial FDI into China rose to $144.4 billion, up 4.5% year on year. In January this year, the country made a good start in the use of foreign capital, which reached $13.5 billion, up 6.2% year on year. Foreign-funded enterprises have maintained stable operation and production in China, and a number of major foreign-funded projects are being implemented steadily despite the impact from the COVID-19 pandemic. A total of 94% of U.S. companies are optimistic about the business outlook in China this year, and more than half said that China remains their top investment destination, according to the 2021 White Paper on the Business Environment in China released by the American Chamber of Commerce in South China. However, it is not only companies from the U.S. Those from Japan, Europe and elsewhere are also optimistic about the business outlook in China.
The next step of promoting stable foreign investment still faces many challenges. In 2021, the NDRC, in line with the deployments of the CPC Central Committee and the State Council, will carry out opening-up in a larger scope, wider areas and at a deeper level, and step up building of a new system for a higher-level open economy. The country will fully implement the foreign investment law to better promote and protect foreign investment and continue to improve its business environment.
First, we will continue to reduce the negative lists for foreign investment. China revised its negative lists of foreign investment for four consecutive years from 2017-2020. The number of sectors that are off-limits for foreign investors has been cut by nearly two-thirds. A series of major opening-up measures have been launched in finance, automobile, and other sectors, and the manufacturing industry has been basically opened up. In 2021, we will further shorten the negative lists for foreign investment, with more efforts made to ensure opening-up of the manufacturing industry and promote the orderly opening-up of the service industry. We will extensively introduce advanced technology, management experience and business models, and promote high-quality economic development with a high-level of opening-up. At the same time, we will also give full play to the FTZs' role as the "test field" for further opening-up, and encourage them to continue pilot projects.
Second, we will continue to expand the fields where foreign investment is encouraged. The new 2020 Catalog of Industries Encouraging Foreign Investment took effect this January, adding 127 items to the list and further expanding the scope for foreign investment. Next, we will focus on its implementation, apply combined measures of boosting the increment, stabilizing the stock and enhancing the quality, and improve the relevant supporting policies. We will actively channel more foreign investment into fields like advanced manufacturing, high technologies, and energy conservation and environmental protection, as well as into producer services such as research, development, and design; modern logistics; and information services. Finally, investment will be encouraged in China's central, western, and northeastern regions to give better play to foreign capital's role in ensuring the stability of industrial and supply chains.
Third, we will ramp up efforts to promote the implementation of major foreign investment projects. In 2018, the NDRC led the establishment of a special task force for major foreign investment projects to coordinate project implementation and solve any problems involved. So far, four batches of major foreign investment projects have been launched, with a total investment of more than US$110 billion. This year, we will launch the fifth batch of such projects and provide policy support in industrial planning, land use, environmental assessment, and energy use, etc. We will continue to focus on fields like advanced manufacturing and high technologies when supporting major foreign-invested projects. We will encourage foreign investors to participate in the high-quality development of China's manufacturing sector, in the construction of new infrastructure and in China's innovation-driven development, and better leverage the exemplary role of these projects. We will encourage localities to improve their mechanisms, promote coordination at all levels, and provide services at every stage of the project.
Fourth, we will fully implement a post-establishment national treatment for foreign investment. Since last year, China, in accordance with the arrangements to ensure stability on six fronts (employment, finance, foreign trade, inbound investment, domestic investment, and market expectations) and maintain security in six areas (employment, people's livelihood, market entities, food and energy, industrial and supply chains, and operations at grassroots levels), has introduced a series of measures in fields including tax, finance, and social security to alleviate difficulties encountered by enterprises. These measures are equally applicable for foreign companies. We will continue to promote the equal treatment of foreign and domestic enterprises in terms of government procurement, land supply, the reduction and exemption of tax and fees, license applications, standards-setting, project application, and human resources policies, among others.
Regarding the Export Control Law that has drawn some foreign enterprises' attention as you mentioned, the purpose of the law is to restrict the export of dual-use items, military items, and other controlled items. It also means that domestic and foreign enterprises are treated equally in terms of the control scope and measures. In general, the normal export of foreign enterprises won't be affected.
Fifth, we will effectively strengthen oversight for business services. We will more actively introduce relevant policies and measures to foreign enterprises, enhance information services through multiple channels, and readily resolve difficulties faced by foreign-funded projects in investment, production, and operation in a coordinated manner to create a more convenient environment for foreign enterprises to invest in China. At the same time, we will continue to refine the regime of pre-establishment national treatment plus negative list for foreign investment, and security reviews of foreign investment. We will work to establish a fair, transparent, efficient, and safe regulatory system that is in line with high-level opening-up and international norms, in order to foster a favorable investment environment. Thank you.
