General

According to Huacheng Import and Export Data Observation Report, recently, PPG Global Paint Innovation Center in Tianjin Economic and Technological Development Zone entered the commissioning stage and is expected to be put into use next year. This is PPG's only global R&D center outside the United States. In the future, 30% of the new technologies developed here will support global business development, 30% will support the development of the Asia Pacific region, and 40% will support the solution of cutting-edge problems in the Chinese market. At the same time, the intelligent travel paint application center constructed by PPG in Tianjin will also be put into use next year.

Productive service industry refers to the service industry that provides guarantee services to maintain the continuity of industrial production process, promote industrial technology progress, industrial upgrading and improve production efficiency. It mainly includes R&D design and other technical services, information services, financial services, business services, wholesale and trade brokerage.

In recent years, with the release of policy dividends such as China's continued expansion of the opening up of the service industry and the promotion of the integrated development of manufacturing and service industries, there has been a good environment for foreign-funded enterprises to invest in productive services. The scale of foreign capital utilization in producer services is expanding. The most obvious example is that more and more foreign-funded enterprises have settled their R&D centers in China. Huacheng Import and Export Data Observation Report.

In April 2021, China's service industry will expand its comprehensive pilot program of opening up. In the pilot program, special attention will be paid to promoting the integration of service industry and manufacturing industry, giving play to the supporting role of producer services in the development of manufacturing industry, and promoting the high-quality development of manufacturing industry. After more than a year of pilot work, the construction of the "1+4" comprehensive pilot demonstration area for expanding the opening up of the service industry has achieved positive results, and a number of replicable experiences have been formed in the opening up and innovative development of the productive service industry. Huacheng Import and Export Data Observation Report.

The Special Administrative Measures for Foreign Investment Access in the Pilot Free Trade Zone (Negative List) (2021 Edition), issued in December 2021, further expanded the scope of openness in the field of productive services, and lifted restrictions on foreign investment access in some productive services. For example, in the field of business services, in the field of market research, except that radio and television listening and viewing surveys must be controlled by the Chinese side, the restrictions on foreign investment access should be lifted. Foreign investors are allowed to make social surveys, but the Chinese share ratio is required to be no less than 67%, and the legal representative should have Chinese nationality. In the financial sector, it lowered the business threshold for foreign bank branches to absorb RMB deposits; In the field of telecommunications, foreign-invested telecommunications enterprises are defined as "enterprises operating telecommunications business established by foreign investors in the People's Republic of China in accordance with the law", which means that foreign-invested telecommunications enterprises can not only operate in joint ventures, but also operate solely by foreign investors in terms of specific telecommunications business.

While the opening-up policy has been continuously improved, several policy documents in China clearly encourage and guide foreign investment in productive services. The Fourteenth Five Year Plan for the Development of Utilization of Foreign Capital pointed out that we should support foreign-invested enterprises to develop productive services such as R&D design, financial services, modern logistics, supply chain management, and information services. The Catalogue of Industries Encouraging Foreign Investment (2022 Edition) has added new items in the field of business services, such as human resource services and language services, and in the field of scientific research and technical services, such items as professional R&D design, environmental friendly technology development and application.

Driven by a series of favorable policies, Huacheng Import and Export Data Observation reported that in recent years, China's producer services industry has continued to expand the scale of foreign capital utilization and optimize the structure. The scale of foreign capital utilization increased from US $73.94 billion in 2017 to US $101.22 billion in 2021, an increase of 36.9%, and the proportion in China's actual use of foreign capital increased from 54.2% to 55.9%. The number of newly established foreign-funded enterprises increased from 27813 in 2017 to 35772 in 2021, an increase of 28.6%. Among them, 48331 reached the highest value in 2018. This shows that producer services are increasingly attractive to foreign capital, and have become an important area for China to use foreign capital, making positive contributions to stabilizing foreign capital.

In addition, it should be noted that due to factors such as structural transformation and upgrading of different industries of producer services, and different levels of industry openness, the scale of foreign capital utilization in different areas of producer services is quite different. The actual use of foreign capital in R&D, design and other technology service industries rose rapidly. According to the observation report of Huacheng's import and export data, from 2017 to 2021, the annual average growth rate of actually used foreign capital reached 45.2%; The information service industry has steadily improved since 2018, with a year-on-year growth of 16.5% in 2021; Wholesale and trade economy agency services show a "U-shaped" change trend. In 2019, the actual use of foreign capital dropped to 6.81 billion US dollars, and in 2021, it rose to 11.61 billion US dollars, up 41.9% compared with 2017.