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  Your Location:Home>>The Favorable Environment for Overseas Investment
 
The Favorable Environment for Overseas Investment
 

1. Policy support
1.1 Macroeconomic policy
In 2009, the Ministry of Commerce, Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Finance, Customs Department, AQSIQ jointly issued " Opinions on the promotion of sustained and healthy development of china's auto exports" in which Point 7 said that "vigorously implement the" going out "strategy, take efforts on international marketing." The opinions includes promotion of foreign investment of enterprises with comparative advantage and enterprises alliances, setting up enterprises or offices overseas, expanding the scale of manufacturing, more closing to the market, to promote the exports of auto products, technology and services.

This Opinion was followed by “Opinion on encouragement of technology exports" issued by the Ministry of Commerce and Ministry of Science. Point six illustrated that "to encourage and support scientific and technological enterprises go out for cooperation through foreign investment, project contracting and acquisition in the way of technology and intellectual property, to encourage high-tech enterprises set up foreign R & D institutions overseas through mergers and acquisitions and to promote exports of technology and services. overseas economic, commercial, educational, scientific and technological institutions shall play the role to provide the guidance for the enterprises to go out for the economic cooperation, and establish outbound R&D and manufacturing bases.

On March 2010, the Ministry of Commerce issued the " Notice on the implementation of the views of the Central Document No.1 of 2010 " which required that local commercial authorities implement the Document No. 1 of 2010 made by Central Committee. The notice pointed out that relative authorities should focus on improving agricultural level of opening up, encourage the exports of agriculture products with competitive advantages, enhance the imports monitoring of sensitive products, encourage agriculture enterprises to go out, and upgrade the quality of use of foreign capital.

 So far, china's "going out" strategy involving industry, agriculture, science and technology and other fields in the Industry, more relaxed industry restrictions provide favorable background and policy support for Chinese enterprises to go abroad.


1.2 Exchange Policy

 "Notice on expansion of exchange reform on overseas investment of  ”issued by State Administration of Foreign Exchange said “increase the volume of foreign exchange from 3.3 billion to 5 billion.” The right of supervising source of overseas investment foreign exchange of local branches increased from 3 million US dollars to 10 million US dollars.

 “notice on Adjusting Some Foreign Exchange Management Policies for overseas investment ” issued by State Administration of Foreign Exchange said domestic investors may use its own foreign exchange, purchase foreign exchange with RMB’s or domestic/foreign exchange loans as the foreign exchange for overseas investment.

Since July 1, 2006, the State Administration of Foreign Exchange no longer check the amount of purchase of foreign exchange by the local branches.

Approved by the relative authorities, domestic investors shall go through the purchase and payment of exchange procedures in accordance with the effective regulations.


 In recent years, the Ministry of Commerce, the State Administration of Foreign Exchange and other departments jointly issued relative documents to soften the requirements of purchase of foreign exchange of enterprises. In 2007, china continued to improve the fiscal, credit, foreign exchange, insurance and other policies to support enterprises to participate in the international business operations, the release of “view of encouraging and guiding non-state enterprises to overseas investment and international cooperation.” Is one example.


1.3 Tax Treaties
In order to implement the reform and opening-up policy, attract foreign capital and technology, and meet the economic and technological development needs, in January 1981, China and Japan started to the negotiations on avoidance of double taxation agreement. Up to 2007, a total of 89 tax treaties had been signed. Moreover, china has also signed bilateral agreements to avoid double taxation, with 86 countries, which reduced tax risk of overseas investment.

 

2. Improve laws and regulations

the Chinese Government promulgated series of management documents, such as "rules of approval on establishment of enterprises overseas”, “ rules of approval on establishment of enterprises in Hong Kong Special Administrative Region and Macao Special Administrative Region ”. In 2009, the Ministry of Commerce promulgated “Measures for overseas investment management ”, the state Administration of Foreign Exchange issued “Measures for foreign exchange control of overseas direct investment ”. To promote domestic enterprises to go abroad, Chinese government issued series of regulations and the legal system of  management on overseas investment was greatly improved.

 

The ministry of commerce will issue the reports to remind the enterprises of avoiding investment risks, "report on barriers to national investment "is such an example. So, all the problems, barriers, risks encountered by the Chinese companies when going out can be reported to the relative authorities. The compilation and release of investment environment and relative issues of other countries/ regions reflect the determination of Chinese government to encourage the domestic companies to invest overseas, thus making the companies more confident and efficient when going abroad.

 

3. Other advantages

3.1 china's domestic household appliances Industry is highly developed which has cultivated a group of enterprises with brand-influence and expansion capacity.
 
3.2 Due to the period of Appreciation of RMB, the exchange risk and overall costs of foreign investment are low.

3.3 china’s Foreign direct investment is attracting the attention of the world's major markets, the financial officials in developed economies such as the United States, European Union have on various occasions expressed their interests in attracting Chinese investment.

3.4 Chen Deming, Minister of Commerce had pointed out in the “Report of National commercial meeting (2008) “that China had established 189 multilateral committees as  mechanisms for trade cooperation with 129 countries/ regions and 13 international organizations. Besides, china had signed bilateral investment protection agreements with 123 countries which play an important role in strengthening the bilateral economic and trade cooperation and protecting the rights of the enterprises when investing overseas.

                               

 

 


 

 
 
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