China willing to change to attract foreign investment. Is the situation that serious?
China is ready to introduce new rules to break down some of the barriers faced by foreign companies, Premier Li Qiang told global business leaders in Beijing on Sunday.
Addressing the China Development Forum, Li said Beijing will create more opportunities for global investors through macroeconomic policy, urbanization, industrial upgrades and transition to a green economy.
“The fundamentals supporting China's long-term economic growth remain unchanged,” Li said, underscoring the outlook for the world's second-largest economy.
Li said the Chinese government is "carefully" studying some of the issues frequently raised by businesses, including market access, public procurement and cross-border data flow.
“Some issues have been substantially resolved, while for others we are still working on solutions to ensure a good agreement,” he said, two days after China eased security controls for cross-border data transfers.
He also said Beijing will make government services more efficient and protect the legitimate rights and interests of businesses of all types.
“We believe that a more open China will bring more win-win cooperation opportunities to the world,” he said
Propaganda or reality
The questions that should arise after this discussion are:
- Is this a real opening?
- why this talk right now?
The first point is linked to a healthy skepticism about the coherence between politicians' words and their actions. Prime Minister Li was addressing foreign investors, so it is obvious that his words were soft towards them.
But there is the second question: assuming that his words correspond to the truth, why are they being spoken now? The new government has set economic objectives that foresee growth of 5%, a very high number for a Western government, but modest for China which grew by 5.2% on an annual basis in the last quarter of 2023.
An opening like the one that Li predicts to attract foreign financing suggests that not everything is going exactly as the Chinese government would like and that, despite some positive signs, the Chinese economy is still in serious difficulty, to the point of having to return to attract foreign investments to continue growing.
However, the attraction of new foreign companies can occur not only by easing some internal constraints, but also requires an international political change and a normalization of relations with neighbors. We will soon see whether the prime minister's speech was just propaganda or whether it will have real practical implications.
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The article China willing to change to attract foreign investment. Is the situation that serious? comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-cina-disposta-a-cambiare-per-attirare-investimenti-stranieri-la-situazione-e-cosi-grave/ on Sun, 24 Mar 2024 08:30:10 +0000.