China has published a list of 24 guidelines to further promote foreign investment, with a focus on biotechnology. The guidelines include policies to facilitate investments, issuing business visas, and offering tax incentives for foreign businesses with an aim to “improve the business environment for foreign investors and boost foreign direct investment” (FDI). The guidelines include backing of investments in the biotech industry, highlighting it as “an area of major focus”. “We encourage foreign investors to set up research and development (R&D) centers in China and support their participation in major scientific research projects,” the document said, adding that clinical trials and product registrations for listed biopharmaceuticals outside the country would also be made more efficient. Another list of measures to boost investment from the private sector was published by China’s economic planner in late July, as both private and foreign investment continued to dip.
Chen Chunjiang, Assistant Minister of Commerce, said that the government was looking for a “new cooperation model in procurements”, and that it would like to encourage and support foreigners who want to invest in “world-leading” Chinese innovation. Yao Jun, Director of Planning at the Ministry of Industry and Information Technology (MIIT), said that the government would continue to push for FDI in areas including “advanced manufacturing” and “energy conservation and environmental protection”. Beijing hopes to encourage more FDI in central-western and northeastern parts of China, he said. The latest State Council document also said there would be a “fast track” for foreign investors who fulfill certain conditions on the transfer of cross-border data, without specifying further. “There will be efficiency in security reviews for cross-border data transfer and encouragement in the free and secured flow of data,” the document said.
Beijing has been introducing new laws in recent years to tighten controls on the transfer of cross-border data, imposing tough penalties for the unauthorized collection, processing, storage or use of data, while adding security reviews for “important” offshore data transfers. Such moves have only heightened concerns among foreign firms operating in a number of Chinese industries. In the document, the government said it would back foreign companies in receiving more “equal treatment” in “standard-setting” processes and public procurements. The State Council called on local governments to protect foreign businesses’ rights and asked foreign investors to “report” if they believe their business interests have been harmed due to “unfair treatment”.
A number of foreign chambers said they particularly welcome assurances in encouraging R&D – such as offering preferential tax policies and visas for foreign executives – and advancements in safe cross-border data transfers, as these have been atop the list of major concerns among their members. Yet, many said it would take time to observe how such promises are put into place. Jens Hildebrandt, Executive Director and Board Member of the North China chapter of the German Chamber of Commerce in China, said China’s opening up of “crucial areas” such as telecommunications, public procurements, and pharmaceuticals would be “highly welcomed if implemented”. The biotech industry – including biopharmaceuticals – has become one of the major battlegrounds amid deteriorating China-U.S. relations, as the U.S. announced an executive order last year calling it a critical technology for review and clearance. China’s overall FDI dropped by 2.7%, year-on-year, to CNY703.65 billion in the first half of 2023, according to data from the Ministry of Commerce (MOFCOM) in July, the China Daily reports.
