China needs predictability in govt policy, intellectual property protection to keep foreign investment: China’s former Commerce Minister
China’s former Commerce Minister Chen Deming called for predictability in government policy making, progress on intellectual property protection and respect for talent to keep foreign investment in China.
Speaking at an annual forum hosted by the Center for China and Globalization on Friday, Chen said the preferential policies on land and taxation that helped attract foreign investments since the late 1970s have almost “reached the ceiling.” They should not be used as the main tools to attract foreign investment anymore.
He said foreign companies hope that China could give them a better environment in terms of intellectual property protections and policies. He served as China’s commerce minister from 2007 to 2013 and now serves as the chairman of the China Association of Enterprise with Foreign Investment, a national nonprofit organization, mainly composed of companies with foreign investments in China.
Foreign businesses in China have reported difficulties related to the business environment and hiring. There have been renewed concerns to preserve foreign investment in the country following the sudden regulatory clampdown on private education that roiled financial markets. In previous months, China has adopted a high-handed and unpredictable regulatory approach towards Chinese companies as evident from a crackdown on ride-hailing firm DIDI, Tencent, Alibaba, Meituan etc under various pretexts like national security, cybersecurity, anti-monopoly etc, a signal enough for foreign companies.
Beijing is now discouraging listings of Chinese tech firms abroad with new rules on IPOs, stressing the need to protect data security. As reported earlier this year, European companies in China said they had problems hiring skilled overseas professionals for their China operations because of the country’s strict Covid-19 border controls. In June, a business confidence survey by the European Union Chamber of Commerce in China found that an “alarming” 41% of respondents believed business became more political in the past year and that there are “growing concern” over further tensions during 2021. Chen said some foreign businesses in China are considering leaving China but want to continue operations with more supportive policies. He also said globalization is at a new crossroads and faces difficulties as global governance lags but said that the trend of globalization will not stop, even if hindered.