The growing scuffle between Beijing and Washington on a trade dispute has made China ease constraints on foreign investment in a wide variety of sectors including banking and agriculture. However, the move is not much acclaimed globally. It’s been deemed as a small pace with minimum potential to iron out the recent mugging made on China by the Trump administration. The trade practices of China was characterized as “unfair” by the White House and China’s move has not been seen as a perfect repartee to the same.
But, there are honchos in China itself who have considered this stride as a bold one. According to Zhengyuan Bo, a senior analyst in a political risk analytics company in Shanghai, “China has made some bold moves to lift investment restrictions in many industries – including many that could be considered strategic such as finance and agriculture,” However, the politicians who happen to support the move have it to state that it’s quite imperative for the investors to trail through the implementation of these new dictums strictly because China is still expected to cite severe capital requirements which may prevent the foreign investors from passing in the Chinese Market.
China’s Reform Commission and National Development brought out a new kind of its purported negative list that explicates sectors where foreign investment is almost restricted. The new decrees are going to be on effect by July 28th, 2019. Even, heavy industries like oil, mining, chemicals, steel and shipbuilding will also fall under the ambit of this canon.
The move is instigated by the stern restrictions on Chinese investment in the USA by Congress and the White House. Mainly, the contracts taking in American technology ventures used to be imposed with hard-hitting constraints and the move, as it is believed, has been initiated to save the cause. The discussion, however, has given birth to a number of Trump administration tariff warnings on exports from China to the USA. The duties levied on $50 billion worth of Chinese artefacts are the perfect example of the same.
European Union and the USA, the top trading partners of China, have disparaged the investment rule that prompts the Chinese ventures to invest in their market freely. Especially, when China curbs the foreign ventures’ ability to arrive in the world’s second largest economy, this criticism makes sense indeed!
Nevertheless, China has mentioned it quite repeatedly that it will carry on market reforms at its own pace. It has also added that it will execute the decision of digging out new markets based on its own requirements, not being pressurized by any external source. In such context, the foreign businesses have also showcased the example of the country’s assurance to execute a number of quotas by the end of this year.
The chief economist at AVIC securities, Xu Weihong, has said that China is expected to let some big reputed foreign financial firms pave in the country and open branches. According to her, the sectors like life insurance and securities should definitely be in the list. She added, “China may not let them all in at once, but we expect it to want to showcase a few success examples.”