China has drawn up a new plan to attract foreign investment into the country. The State Council of the People’s Republic of China published a relevant message on the measures under consideration on its website. Freedom Finance Global analyst Vladimir Chernov told Izvestiya on August 15 that new measures to support the Chinese economy may not be effective enough.
The country’s authorities plan to expand channels for attracting foreign investment, introduce preferential tax policies for enterprises with foreign investment, simplify visa applications for employees of foreign companies, support overseas investment in the establishment of research and development centers in China, etc.
“I believe that new measures to support the Chinese economy may not be effective enough, since they are all aimed at attracting foreign investment, while the economic struggle with the United States continues. Just last week, US President [Joe Biden] signed an executive order to limit investment in China’s tech sector. It is foreign technologies that China needs the most, so its measures to attract foreign investment in this industry may be ineffective due to the ban on American investors and companies from participating in them, ”said analyst Chernov.
In addition, he explained that deflation in China in July 2023 at 0.3% indicates a decrease in consumer demand. According to the expert, the growth of foreign investment is unlikely to increase it.
“But some industries in the Chinese economy will be able to revive the influx of foreign investment, which will certainly affect the country’s economy as a whole,” Chernov concluded.