General

Under the background of anti-globalization, the global economic operation is facing great uncertainty. The rising cost of production factors in China has also increased the uncertainty of the business risks and investment intentions of foreign enterprises in China. Facing the impact of many uncertain factors, how can China improve its global competitiveness in attracting investment?

According to Huacheng Import and Export Data Observation, "In the face of the opportunities of China's large market and economic restructuring and upgrading, the total amount of new foreign investment continues to expand and maintain the growth trend, but the withdrawal of foreign capital stock should not be underestimated. China should not only maintain the stable growth of new foreign investment, but also maintain the stability of foreign capital stock under the impact of uncertainty, which is a key part of China's integration into the global economy and the international division of labor system." Sang Baichuan, president of the Institute of International Economics of the University of International Business and Economics, said at the recent press conference of China's Foreign Investment Development Report (2022) and the seminar on "Foreign Direct Investment under the Impact of Uncertainty".

Pilot Free Trade Zone and other open platforms lead the innovation of foreign capital management system

China's actual use of foreign direct investment has increased steadily in the process of structural adjustment. According to Huacheng Import and Export Data Observation, it has increased from US $111.716 billion in 2012 to US $173.48 billion in 2021, an increase of more than 55%. The annual use of foreign direct investment has remained the second in the world and the first in developing countries for 30 consecutive years.

Sang Baichuan believes that the reason for China's steady growth in foreign investment absorption is that open platforms such as free trade pilot zones, free trade ports and development and opening pilot zones lead the innovation of foreign investment management system.

Over the past ten years, China has set up 21 pilot free trade zones, making full use of the role of the pilot free trade zones in deepening reform and expanding the opening of pilot fields, taking the lead in building an institutional system based on fair competition and the liberalization and facilitation of trade and investment, establishing a safe and controllable risk management system, promptly replicating and promoting institutional innovation achievements, and driving the country to optimize the business environment for foreign investment; Build a free trade port with Chinese characteristics in Hainan, promote high-level and open institutional integration and innovation, and build a rule system for the free, convenient, safe and orderly flow of goods and service elements. Huacheng Import and Export Data Observation Report.

The Report on the Development of Foreign Investment in China (2022) (hereinafter referred to as the Report) points out that China has also set up pilot zones for development and opening up, built a new highland for the opening up and utilization of foreign capital in the mainland, promoted the coordinated opening up of the central and western regions and coastal areas, and improved the construction level of border economic cooperation zones and cross-border economic cooperation zones. The foreign capital management system of the special economic zones with different characteristics in the central and western regions has gradually improved, becoming a hot spot for attracting foreign investment.

The Report suggests that for active participation in international investment governance, on the one hand, we should deeply participate in multi-level international economic and trade cooperation. Continue to promote the signing of investment agreements and free trade agreements with emerging economies and major trading partners, fully draw on the corresponding provisions of international high standard agreements such as CPTPP and RCEP, and develop the model international investment agreement as soon as possible. On the other hand, build a free trade zone network radiating the "the Belt and Road" to make up for the shortcomings of the existing bilateral investment cooperation mechanism. We should deepen the construction of the existing free trade zones along the "the Belt and Road", actively promote free trade zone negotiations, promote subregional economic and trade cooperation, and build diversified trade and investment cooperation mechanisms for countries and regions along the "the Belt and Road"; Actively promote exchanges and cooperation with countries along the "the Belt and Road", and promote mutual investment in health care, Internet information service, cultural tourism, green manufacturing and other industries.

Increasing pressure on stabilizing foreign investment and broadening institutional open channels for foreign investment

At the same time, the experts at the meeting reminded that we should see the increase of uncertainty in the world economy, profound changes in the domestic and foreign economic environment, and increased pressure to stabilize foreign investment.

Professor Chen Weiguang, Guangdong University of Foreign Studies, took Guangdong as an example to analyze the two sides of the integration of foreign investment and foreign investment. He pointed out that only through institutional opening and high-quality foreign investment can we achieve a high level of opening up in the new situation. We should learn advanced international management experience, benchmark international rules, and form China's voice in the process.

The Report shows that in the past ten years, China's construction of an international business environment for foreign investment has accelerated. China closely tracks the trend of changes in international economic and trade rules, combines the open agreement with the independent opening, and takes the initiative to build a high-level open economic system against the internationally accepted advanced economic and trade rules, and improve the level of liberalization and facilitation of foreign investment.

Zhang Xiaotao, member of the Expert Committee of the China Council for the Promotion of International Trade and dean of the School of International Economics and Trade of the Central University of Finance and Economics, believes that facing the future, China needs to further strengthen the efforts to introduce foreign capital and comprehensively expand the opening up, mainly including: the negative list of foreign investment access should be reduced as much as possible, the threshold of foreign investment access should be lowered, and the negative list of cross-border service trade should be formulated; The open platform should be more practical, and the 21 free trade pilot zones, the Hainan Free Trade Port, the national economic and technological development zone and other platforms should be more practical, and gradually move from the original commodity and factor flow opening to the institutional opening dominated by rules, regulations, management and standards; Further create a market-oriented, law-based and international business environment. Promote the early entry into force and implementation of the RCEP and the formal signing of the China-EU Investment Agreement. He mentioned that foreign investment plays an important supporting role in high-level opening up, and the activity of enterprise entities really reflects economic growth, so it is particularly important to do a good job of marketization and legalization. At the same time, we need to put our eyes on the world dimension in order to understand and solve practical problems from a global perspective.

Hu Jiangyun, a researcher at the Development Research Center of the State Council, pointed out that the only way to attract high-quality foreign investment is to develop technology, deeply integrate into the world, improve the ability to resist risks, grasp structural changes, pay more attention to environmental, labor, values and other issues, do a good job in the construction of rules, improve transparency, and optimize the business environment.

The Report suggests that China should improve the foreign capital security review system and actively participate in international investment governance in the global investment competition. In terms of improving the foreign investment security review system, China has issued the Measures for Foreign Investment Security Review, which should improve and improve the departmental linkage mechanism as soon as possible, strengthen the systematization, integrity and synergy of the review management of all departments, and improve the efficiency of the review management; At the same time, according to the domestic and international situation faced by China's economy, the detailed rules for the implementation of the Measures for the Security Review of Foreign Investment should be issued as soon as possible, listing the specific scope of security review, setting up comprehensive security review considerations, and ensuring the forward-looking of legislation; The detailed review provisions, such as the law enforcement procedures and judicial procedures, should be detailed to be operable. For example, the combination of the Measures for the Review of the Security of Foreign Investment and China's Special Administrative Measures for Foreign Investment Access (Negative List) should be considered, and the prohibited and restricted industries involved in the negative list should be regarded as the important areas of China's security review of foreign investment.

Increased investment attraction in manufacturing industry

At present, China's economy has shifted from a stage of rapid growth to a stage of high-quality development, and attracting foreign investment is also facing a new situation.

According to Huacheng Import and Export Data Observation, recently, the Catalogue of Industries Encouraging Foreign Investment (2022 Edition) was officially released and will come into force on January 1, 2023. Six departments, including the National Development and Reform Commission and the Ministry of Commerce, jointly issued the Several Policies and Measures on Promoting the Expansion of Foreign Investment, Stabilizing the Stock and Improving the Quality of Foreign Investment with the Focus on the Manufacturing Industry, proposing to further increase the strength of attracting foreign investment in the manufacturing industry and focus on solving the outstanding problems faced by foreign-invested enterprises.

Stabilizing the scale of attracting foreign investment in manufacturing industry, improving the quality of attracting foreign investment in manufacturing industry, and promoting the optimization of the utilization structure of foreign investment will help to promote China from a manufacturing power to a manufacturing power, and then strengthen China's position in the global industrial chain supply chain.

How to understand the greater efforts to attract foreign investment and how to view the challenges of foreign investment in high-end manufacturing industry? Liu Canlei, a researcher of the research group of the Report, said that China's huge market has an impact on investors around the world, and greater efforts to introduce foreign capital are to implement a broader, broader and deeper opening-up; The production complexity of high-end manufacturing products is high, and debt and other problems may affect them. At the same time, the adjustment and restructuring of global innovation chain and supply chain may have certain risks.

In terms of improving the position of global value chain, Liu Canlei suggested that efforts should be made from three aspects: "building the foundation", "building the chain" and "strengthening the chain". We should improve the construction of enterprise demonstration bases, create an incubation model of "platform enterprises+unicorns", and form a group of leading enterprises with high technological content, great growth potential and strong leadership. Support leading enterprises to aim at key links, core technologies and major inventions in the industrial chain, implement mergers and acquisitions at home and abroad, and improve the core competitiveness of leading enterprises. Strengthen benchmarking to lead engineering construction and industrial agglomeration. Implement the model of "supporting leading enterprises", encourage leading enterprises to integrate industrial advantages and resources, linear and cross supporting with small and medium-sized enterprises, promote the integration and linkage of large and medium-sized enterprises, and form high-quality industrial clusters.

In addition, Professor Huang Weiping from the School of Economics of Renmin University of China stressed the importance of the digital economy. He pointed out that due to the uncertainty of the new round of scientific and technological revolution and industrial revolution, grasping the dominant position of the digital economy in the restructuring of the global industrial chain will have an important impact on future foreign investment. Huacheng Import and Export Data Observation Report.