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Trade & Investment

China wants fewer curbs in free trade zones to lure foreign investment


A property sales agent (L) shows a potential buyer an electronic map of the Qianhai special economic zone in Shenzhen

A property sales agent (L) shows a potential buyer an electronic map of the Qianhai special economic zone in Shenzhen

China hopes to suspend its laws governing foreign investment in proposed free trade zones, the cabinet said, in a sign the world’s second-biggest economy could open further to foreign competition.

The State Council, China’s cabinet, will ask senior members of the National People’s Congress, or parliament, for the power to suspend laws and regulations governing both foreign-owned companies and joint ventures between Chinese and foreign companies in free trade zones, including Shanghai, the cabinet said on its website.

The move is aimed at “accelerating transformation of the government’s role … and innovating ways of (further) opening up (to foreign investment),” according to the statement, seen on Sunday. It set no timetable, and gave no further details.

Foreign direct investment in China slowed in 2012 but reversed its decline in the first quarter of this year as confidence improved.

China attracted $38.3 billion in foreign direct investment in the first four months of 2013, up 1.2 percent from the same period in 2012.

China’s financial center, Shanghai, will test yuan convertibility and cross-border capital flows in the free trade zone pilot program.

The country’s new leaders have signaled they want to speed the process of making the yuan fully convertible over the next few years, as part of efforts to boost the currency’s use in trade and support wider financial reforms.

Shanghai officials are keen to experiment with freeing up the capital account and yuan convertibility, fearing the city could be left behind as rival centers, such as Hong Kong and Taiwan, move to develop cross-border yuan financial services.

Shanghai stepped up lobbying efforts after the 2012 creation of a special trade zone in Qianhai, near the southern boomtown of Shenzhen and across from Hong Kong, where yuan convertibility is being trialed.

The Qianhai zone, administered by the central bank, the People’s Bank of China, lets banks from Hong Kong offer cross-border yuan-denominated loans to mainland firms.

Other initiatives announced in 2013 include trial programs to smooth the way for foreign firms to move funds in and out of China, cutting the need for approvals and easing bank procedure.

Source: Reuters “China wants fewer curbs in free trade zones to lure foreign investment”
 
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About chankaiyee2

Author of the book "Tiananmen's Tremendous Achievements" about how with the help of Tiananmen Protests, talented scholars with moral integrity seized power in the Party and state and brought prosperity to China. The second edition of the book will be published within a few days to mark the 25th anniversary of Tiananmen Protests All the parts in the first edition remain in the second edition with a few changes due to information available later and better understanding. There are also some changes for improvements of style. The new parts are Chapters 12-19 on events in China after the first edition was published: The fierce power struggle for succession between reformists and conservatives; Xi Jinping winning all elders’ support during his mysterious disappearance for 2 weeks in early September, 2012; and Xi Jinping Cyclone. Chan Kai Yee's new book: SPACE ERA STRATEGY: The Way China Beats The US An eye-opening book that tells the truth how the US is losing to China. The US is losing as it adopts the outdated strategy of Air-Sea Battle while China adopts the space era strategy to pursue integrated space and air capabilities: It is losing due to its diplomacy that has given rise to Russian-Chinese alliance. US outdated strategy has enabled China to catch up and surpass the US in key weapons: Hypersonic weapons (HGV) that Pentagon regards as the weapon that will dominate the world in the future. Aerospaceplane in China’s development of space-air bomber that can engage enemy anywhere in the world within an hour and destroy an entire aircraft carrier battle group within minutes. Anti-satellite (ASAT) weapons, anti-ASAT weapons, stealth aircrafts, drones, AEW&C, etc. The book gives detailed descriptions of China’s weapon development based on information mainly from Chinese sources that the author monitors closely. U.S. Must Not Be Beaten by China! China is not a democracy. Its political system cannot prevent the emergence of a despotic leader or stop such a leader when he begins to bring disasters to people. A few decades ago, Mao Zedong, the worst tyrant in world history did emerge and bring disasters to Chinese people. He wanted to fight a nuclear war to replace capitalism with communism but could not bring nuclear holocaust to world people as China was too weak and poor at that time. If a despot like Mao Zedong emerges when China has surpassed the US in military strength, world people will suffer the misery experienced by Chinese people in Mao era. China surpassing the US in GDP is not something to worry about as China has the heavy burden to satisfy its huge population, but China surpassing the US in military strength will be world people’s greatest concern if China remains an autocracy. US people are of much better quality than Chinese people. What they lack is a wise leader to adopt the correct strategy and diplomacy and the creative ways to use its resources in developing its military capabilities. I hope that with the emergence of a great leader, the US can put an end to its decline and remain number one in the world. China, US, space era strategy, air-sea battle, space-air bomber, arms race, weapon development, chan kai yee

Discussion

One thought on “China wants fewer curbs in free trade zones to lure foreign investment

  1. The idea looks quite attractive, however the words “experimenting & suspending” are being used continually in Chinese policy recently. The lack of investment is due largely to the absolute lack of understanding of where China is heading, and how long these “experiments” will be allowed to continue.

    The Chinese economy is unsustainable on its present course, so China needs foreign investment for its private sector because securing investment loans on the mainland, from mainland funds, is difficult, bordering on impossible. This applies to foreign and local businesses.

    It’s about time the vast funds being held by all the state owned banks were used in the development of China’s economy, not just used to prop up failing government owned enterprises.

    Like

    Posted by Leigh | August 20, 2013, 9:04 am

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