Opinions of the State Council on Further Optimizing the Environment for Foreign Investment and Increasing Efforts to Attract Foreign Investment

By Yoni HaoLast Updated on Aug 14, 2023
Opinions of the State Council on Further Optimizing the Environment for Foreign Investment and Increasing Efforts to Attract Foreign Investment

Promulgation Authorities: State Council of the People’s Republic of China

Release Date: 2023-07-25

Effective Date: 2023-07-25

Source: https://www.gov.cn/zhengce/content/202308/content_6898048.htm

Original Title: 国务院关于进一步优化外商投资环境加大吸引外商投资力度的意见

Opinions of the State Council on Further Optimizing the Environment for Foreign Investment and Increasing Efforts to Attract Foreign Investment

The people’s governments of all provinces, autonomous regions and centrally administered municipalities, all ministries and commissions of and all agencies directly subordinate to the State Council,

Active attraction and utilization of foreign investment are important contents of promoting high-level opening -up and building a new system of open economy. In order to further optimize the environment for foreign investment, improve the level of investment promotion, and intensify the attraction of foreign investment, the opinions are hereby given as follows:

I. General Requirement

We should, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, comprehensively implement the guidelines of the 20th National Congress of the Communist Party of China, adhere to the general work keynote of making progress while maintaining stability, completely, accurately and comprehensively implement new development concepts, build a new pattern of development, and drive high-quality development. We should also better coordinate domestic and international overall situations, create a market-oriented, law-based and international first-class business environment, give full play to the advantage of China’s super-large-scale market, and attract and utilize foreign investment more vigorously and effectively, so as to make contributions to promoting high-level opening up to the outside world and comprehensively building a modern socialist country.

II. Improving the Quality of Utilizing Foreign Investment

(I) Intensifying the introduction of foreign investment in key fields. We support foreign investors in setting up R&D centers in China and jointly carrying out R&D of technologies and industrialization application with domestic enterprises. We also encourage foreign-invested enterprises and the R&D centers established thereby to undertake major scientific research projects. On the premise of complying with the relevant laws and regulations, it is imperative to accelerate the launching of foreign-invested projects in the field of biomedicine for production, encourage foreign-invested enterprises to carry out clinical trials of cell and gene therapy drugs that have been marketed overseas within the territory of China in accordance with the law, and optimize the application procedures for marketing registration applications for drugs that have been manufactured and marketed overseas and are transferred to the domestic market. We support foreign-invested enterprises in the fields of advanced manufacturing, modern services and digital economy etc. to carry out vocational education and training with all kinds of vocational colleges (including technician colleges) and vocational training agencies.

(II) Giving play to the demonstration and leading role of the comprehensive pilot program for expanding opening up to the outside world in the service industry. We should align with international economic and trade rules of high standards and intensify the efforts on demonstration and pioneering of the comprehensive pilot program for expanding opening up to the outside world in the service industry. We encourage portfolio pledge financing of intellectual property, equity and related entity assets, and support the exploration of intellectual property securitization in a standardized manner. Efforts should be made to orderly increase the areas under the pilot program for the transfer of shares of equity investment and venture capital investment, steadily increase the pilot areas for opening up the value-added telecommunication services to the outside world, such as domestic Internet virtual private network business (with the proportion of foreign investment not exceeding 50%), information service business (only applicable to application stores, excluding online publishing services) and Internet access service business (only applicable to providing Internet access service for users).

(III) Broadening the channels for attracting foreign investment. We encourage qualified foreign investors to establish investment companies and regional headquarters, and the enterprises invested and established by the relevant investment companies may enjoy the treatment for foreign- invested enterprises in accordance with relevant state regulations. It is imperative to further implement the pilot program of domestic investment by qualified foreign limited partners (QFLP), establish a sound system for the facilitation of foreign exchange control for QFLP, and support the direct use of the overseas RMB funds for relevant domestic investment.

(IV) Supporting the gradient transfer of foreign-invested enterprises. By relying on pilot free trade zones, state-level new zones, state-level development zones and other open platforms, we encourage the eastern region to cooperate with the central and western regions, northeastern regions, and border areas in the exploration of twinning cooperation in the transfer of industries through a production value, benefit and other sharing mechanism. Supervision over a foreign-invested enterprise making overall gradient transfer within the territory of China shall be conducted based on the credit rating obtained from the Customs authorities at the original place where the enterprise is located.

(V) Improving the promotion mechanism for the construction of foreign-invested projects. It is imperative to perfect the mechanism of special teams for major and key foreign investment projects, strengthen the support of elements, policies and services, and promote the early signing, early launching, early start and early production of foreign investment projects. We should promulgate policies and measures promoting green electricity consumption and support more participation of foreign-invested enterprises in green certificate transactions and trans-provincial and trans-regional green electricity transactions.

III. Guaranteeing the National Treatment for Foreign-invested Enterprises

(VI) Guaranteeing the participation of foreign-invested enterprises in government procurement activities in accordance with the law. Relevant policies and measures shall be introduced as soon as possible to further clarify the specific criteria for “made in China”. It is imperative to research and innovate the cooperative purchase mode and support foreign-invested enterprises in innovating, researching and developing globally leading products in China under such measures as first purchase and order. We should speed up the revision to the government procurement law, carry out special inspection to guarantee the fair participation of business entities in government procurement activities, investigate and punish the practice of giving differential treatment to foreign-invested enterprises and other violations of laws and regulations, and disclose typical cases in due time. Where a foreign-invested enterprise believes that a government procurement activity jeopardizes its rights and interests, it may raise a question and file a complaint according to regulations, and financial authorities at all levels shall accept and handle the case according to the law.

(VII) Supporting foreign-invested enterprises in equally participating in standard setting according to the law. It is imperative to promote the information disclosure of the whole process of setting and revision to standards and ensure that foreign-invested enterprises and domestic enterprises can equally participate in standardization technical committees and standard setting according to the law. We encourage foreign-invested enterprises to set on their own or in conjunction with other enterprises the enterprise standards and provide standardization services. Moreover, we should promote the state-level standardization pilot program in the service industry in demonstration regions under the comprehensive pilot program for expanding opening up to the outside world in the service industry.

(VIII) Ensuring that foreign-invested enterprises can equally enjoy supporting policies. Except otherwise expressly provided in laws and regulations or relating to national security, policies introduced by all regions for supporting industrial development, boosting domestic demand and so on shall not exclude or discriminate against foreign-invested enterprises or the products and services thereof by reason of brand limitation or using foreign-invested brands as the excuse, or impose additional conditions on the entitlement of policies by foreign-invested enterprises or the products and services thereof.

IV. Continuously Strengthening the Protection of Foreign Investment

(IX) Improving the mechanism for protection of rights and interests of foreign investors. It is imperative to improve the mechanism for responding to international investment disputes, clarify the responsibilities of relevant parties, strengthen dispute prevention, and properly handle international investment disputes. We should resolutely crack down on malicious speculation activities that infringe upon the legitimate rights and interests of foreign investors such as release and transmission of false or infringing information via the Internet, and seriously investigate and penalize relevant liable organizations and persons according to the law. It is required to establish a sound mechanism for coordination of complaints lodged by foreign-invested enterprises at the provincial level, and promote the resolution of issues involving multiple departments, or policy and system issues.

(X) Strengthening the administrative protection of intellectual property. It is imperative to improve the administrative adjudication system for patent infringement disputes and intensify the enforcement of administrative rulings. We support the intellectual property workstations in various regions in accepting applications for copyright, patent, trademark and other intellectual property rights of exhibition products, and provide effective measures to prevent infringement. We should strengthen intellectual property protection in the procurement of medicines and medical consumables, and enterprises shall, in procurement activities, independently promise that they do not violate patent law and other laws and regulations. For products involved in intellectual property disputes, relevant authorities shall strengthen communication and consultation, and carry out procurement activities according to the laws and regulations; for the products determined as patent infringement by administrative rulings of intellectual property authorities or effective judgments of people’s courts, measures shall be taken such as no procurement or disqualification thereof.

(XI) Intensifying administrative enforcement in respect of intellectual property. It is imperative to resolutely crack down on infringement upon the intellectual property of foreign-invested enterprises and carry out special enforcement actions against cross-regional and chain infringement and illegal activities. We should improve the rapid and coordinated protection mechanism for intellectual property, speed up the handling of cases with clear facts and irrefutable evidence according to the law, and establish a sound law enforcement mechanism integrating online and offline, and appropriately simplify procedural requirements.

(XII) Regulating the development of foreign-related economic and trade policies and regulations. In developing various foreign-related economic and trade policies and measures, it is imperative to attach importance to enhancing transparency and predictability, and lawfully listen to the opinions of foreign-invested enterprises. For newly promulgated policies and measures, the transition period shall be reasonably set.

V. Improving the Facilitation Level of Investment Operation

(XIII) Optimizing the stopover and residence policies for foreign employees of foreign-invested enterprises. It is imperative to continuously optimize entry-exit policies and measures, and provide entry-exit, stopover and residence facilitation for foreign senior executives and technical personnel of foreign-invested enterprises and their families. We should guide Chinese embassies and consulates in key capital-attracting countries or regions to continue to facilitate visa applications by executives of transnational corporations, and timely publicize China’s entry policies through overseas business institutions. We should also provide convenience for the applications for permanent residence of foreign senior executives and technical personnel employed and recommended by qualified foreign-invested enterprises, and enhance the convenience of application of foreign permanent residence identity cards in public transport, financial service, medical insurance, Internet payment and other scenarios.

(XIV) Exploring a convenient security management mechanism for cross-border data flow. It is imperative to implement the requirements of the Cybersecurity Law, the Data Security Law and the Personal Information Protection Law and other relevant laws, establish green channels for qualified foreign-invested enterprises, efficiently carry out security assessment for outbound transfer of important data and personal information, and promote the safe and orderly transfer of data. We encourage regions such as Beijing, Tianjin, Shanghai and the Guangdong-Hong Kong-Macau Greater Bay Area to explore, on a pilot basis, the formation of a list of general data that can flow freely, develop service platforms, and provide compliance services for cross-border data flow, in the process of implementing such systems as the security assessment for data to be transmitted overseas, personal information protection authentication, and record-filing of standards contracts for transmitting personal information abroad.

(XV) Coordinating and optimizing the law enforcement inspection of foreign-invested enterprises. It is imperative to coordinate and promote the supervision model of “oversight through inspections by randomly selected inspectors of randomly selected entities and the public release of inspection results” and classified management of credit risks, and further reduce the proportion and frequency of random inspections for foreign-invested enterprises with low credit risks. We support qualified regions in coordinating enterprise-related law enforcement inspection items such as safe production, environmental protection and product quality to realize “inspection of multiple matters at one time”.

(XVI) Improving the service assurance for foreign-invested enterprises. It is imperative to establish a sound round-table conference system for foreign-invested enterprises. Special teams for major and key foreign-invested projects at all levels shall establish a sound linkage and coordination mechanism to timely coordinate and solve difficulties and problems encountered in contract signing, construction and production of such projects. Efforts should be made to properly issue certificates of origin under free trade agreements and provide convenience for foreign-invested enterprises to enjoy tariff relief policies.

VI. Intensifying Fiscal and Tax Supports

(XVII) Intensifying the support of foreign investment promotion funds. We should intensify the support for landmark foreign-invested projects with the central government’s special funds for foreign trade and economic development and promote the implementation of projects as soon as possible. We should also improve the use of foreign investment promotion funds by local governments at all levels and intensify the investment promotion services for key industrial chains. In addition, we encourage various regions to provide supports for the investment projects of key transnational companies within the scope of statutory authority.

(XVIII) Encouraging foreign-invested enterprises to reinvest within the territory of China. It is imperative to implement the policy of temporarily not levying withholding income tax on the reinvestment with the profits obtained in China by foreign investors, intensify publicity and guidance, guide local commerce and taxation authorities at all levels to detail the applicable scope of the policies, application materials and handling procedures, and carry out the specific implementation work properly.

(XIX) Implementing relevant tax preferential policies for foreign-invested enterprises. It is imperative to counsel and help foreign individuals enjoy subsidies and allowances for housing subsidies, language training fees and children education fees etc. and other tax exemptions or incentives in accordance with relevant regulations of the State. We should guide and help foreign-funded R&D centers to enjoy import tax policies supporting scientific and technological innovations and VAT refund policies for purchasing domestically manufactured equipment in accordance with relevant regulations of the State.

(XX) Supporting foreign-invested enterprises in investment in the fields encouraged by the State for development. We support various regions in implementing supporting incentive measures for foreign-invested enterprises complying with the Catalogue of Encouraged Industries for Foreign Investment within the scope of their statutory authorities, and should properly implement relevant supporting policies and measures for tax exemption for imported equipment for encouraged foreign-invested projects.

VII. Improving the Ways to Promote Foreign Investment

(XXI) Improving the working mechanism for attracting investment. Efforts should be made to carry out a series of activities for the “Year of Investment in China”, continue to build the brand of “Investment in China”, establish a sound working mechanism, and guide and serve various regions in promoting foreign investment. We encourage the regions where conditions permit to establish cooperation mechanisms for investment promotion with relevant countries or regions and build investment promotion platforms in various forms. All regions are encouraged to explore the implementation of more effective and flexible employment mechanism and remuneration system for non-civil service and non-public institution posts in departments and teams for promotion of foreign investment, strengthen staffing for promotion of foreign investment under cross-regional, cross-level and cross-departmental adjustments and other methods, accelerate the establishment of diversified work system for promotion of foreign investment, accelerate the establishment of a diversified foreign investment promotion system, and promote the formation of a flexible and efficient coordination and linkage mechanism for the promotion of foreign investment with the participation of the government, investment attracting organizations, business associations, intermediaries, and leading industrial chain enterprises.

(XXII) Facilitating the promotion of outbound investment. We support investment promotion groups in various regions in normally carrying out investment promotion activities overseas, attend exhibitions and other activities, and invite foreign investors to China for investment negotiations. For major and key foreign-invested projects, multiple-trip business visas shall be issued to relevant foreign personnel as required by work.

(XXIII) Expanding foreign investment promotion channels. It is imperative to strengthen the contact between Chinese embassies and consulates and key enterprises in the host countries or regions and publicize China’s investment opportunities. We support various regions to strengthen the communication with the economy, trade and investment promotion agencies of the Ministry of Commerce and the China Council for the Promotion of International Trade stated abroad, and should give better play to the role of overseas investment promotion organizations (representative offices) established by local regions, and intensify the connection and cooperation with overseas economic,  trade and investment promotion agencies.

(XXIV) Optimizing the evaluation of foreign investment promotion. It is imperative to establish a sound evaluation system for the effectiveness of foreign investment promotion, pay attention to the actual contribution of investment promotion to economic and social development, prevent the simple use of statistical data on the scale of investment promotion and the actual amount of investment as the basis for evaluation and reward/punishment of relevant enterprises and personnel, and effectively prevent fraud and vicious competition in foreign investment promotion.

VIII. Strengthening Organization and Implementation

All regions, departments and relevant entities shall resolutely implement the decisions and arrangements of the CPC Central Committee and the State Council, improve political stance, effectively further optimize the foreign investment environment, intensify the attraction of foreign investment, and strive to achieve the goal of promoting stability and quality improvement by utilizing foreign investment. We encourage various regions to introduce supporting measures in light of their local conditions to strengthen the synergy of policies. The Ministry of Commerce shall, in concert with the relevant departments and entities, strengthen guidance and coordination, effectively deal with policy publicity, timely implement policies and measures, create a more optimal investment environment for foreign investors, and effectively enhance the confidence of foreign investors in investment.

State Council

July 25, 2023