China pledges to give foreign companies the ‘national treatment’

China is now promising to treat foreign companies the same as domestic ones as foreign investment stalls amidst an escalating trade war with the United States and increased geopolitical tensions, with certain products that could be used to develop armaments banned from export to the world’s second largest economy.

Moves to ‘de-risk’ supply chains have also had an impact on the country’s manufacturing sector. Flows of foreign direct investment in China fell by eight per cent last year.

For the Asian nation, that has gotten used to rapid growth, new economic struggles related to drawn out property crisis and high levels of municipal debt, not to mention an ageing population, the move to attract more investment from leading foreign firms is seen as a key driver of its future development.

On Monday, Vice Commerce Minister Guo Tingting told attendees at the China Development Forum in Beijing that the Communist Government will “fully guarantee national treatment for foreign companies, so that more foreign companies can invest in China with confidence and peace of mind.”

Vice Minister Guo said China will open high-level areas of industry and finance to the global market, but did not give details on how the country will “guarantee national treatment.”

Her comments follow those of Premier Li Qiang on Sunday, who said that China will continue efforts to build a first-class business environment for all – locals and foreigners alike.

Joining Vice Minister Guo at the China Development Forum was Minister of Industry and Information Technology Jin Zhuanglong, who announced that China will lift restrictions on foreign investment access to its manufacturing sector.

“China will vigorously promote the deep integration of scientific and technological innovation and industrial innovation, and encourage foreign-invested enterprises to set up R&D centres,” said Minister Jin.