China’s State Council has issued guidelines to further optimize the foreign investment climate in the country, amid Beijing’s ongoing economic standoff with Washington.
The plan includes a government pledge to shore up foreign projects related to a spate of sunrise sectors, such as the biopharmaceutical industry, as well as to lure qualified companies from abroad into setting up investment units and regional headquarters in China.
“The measures are certainly useful and come at a crucial moment,” Francesco Sisci pointed out.
He added, though, that it remains unclear “How effective they [these measures] will be […] because it's easy to pull out, and it's difficult to come in, and it's even more difficult to convince people who are pulling out to come back again.”
Sisci suggested that these steps “could be tailored to help non-Western companies come into China with less demanding requirements.” According to him, only time will tell if these firms “will follow the flow or go against it.”
When asked what sunrise sectors can attract investors to China, the expert said, “the industries attractive for foreigners are the ones that could develop the domestic market in China or the market of the companies” that are interested in financial injections into the PRC.
As an example, he went on, one can mention Argentinian, Brazilian or South African companies, which Sisci said “may produce something in China and then export it from the PRC to the destination country.”
“One sector could be, of course, renewable energies, batteries, where Chinese companies have an edge,” he argued, noting that Beijing’s foreign investment measures “are important to inject confidence in the domestic market.”
The remarks come after Chinese Embassy spokesperson Liu Pengyu told Sputnik that Beijing is very disappointed US President Joe Biden moved forward with plans to roll out new restrictions on American economic investment in China.
"The latest investment restrictions will seriously undermine the interests of Chinese and American companies and investors, hinder the normal business cooperation between the two countries and lower the confidence of the international community in the US business environment," Liu cautioned.
This followed Biden signing an executive order to authorize the Treasury Department to restrict US investments into Chinese entities engaged in activities involving sensitive national security technologies in at least three sectors. These include semiconductors (also known as chips) and microelectronics, quantum information technologies, and certain AI systems.
These developments have been unfolding as Beijing and Washington continue to lock horns to prevail in the booming global chip industry, with Washington slapping restrictions and expanding investments in the domestic chip industry in a bid to get ahead in the race.
In response, China’s Ministry of Commerce recently announced that it would restrict exports to the US of rare earth metals, such as gallium and germanium, which are used to manufacture semiconductors. Beijing said it needed to protect its “national security and interests.”
The recently-released 2023 US National Intelligence Strategy has, meanwhile, claimed that the PRC is the only American competitor "with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.”