Investing in China no longer foreign

BEIJING – In recent years, some foreign investors have complained that the environment for investments in China is regressing.

That, to me, is absolutely untrue.

Foreign-invested companies have been given equal footing as Chinese companies. In an effort to give foreign-invested companies a more active role in the economy, the Chinese government is currently designating them as Chinese-owned companies.

Perhaps the most glaring example of how the government has helped foreign investors is the document released last year called Several Opinions of the State Council on Further Utilizing Foreign Capital.

In implementing this document, China improves its investment landscape.

The document said the policies to upgrade national industries will include qualified foreign-invested companies. It also said China will encourage qualified foreign-invested companies to cooperate with domestic companies and research institutes to apply for national scientific development and innovation projects.

It is also worth noting in this document that China has focused on the quality, not quantity, of foreign investments.

With these new policies, foreign-invested companies should adjust to take advantage of growing opportunities in China. They should strengthen their company’s social responsibilities. How do they do this? Here are a few suggestions:

First, the company should emphasize strengthening its efforts to blend in with the Chinese culture and surroundings. It is helpful for the company to move most of its major business activities to China, especially in research and development.

Second, since China is continuously upgrading its industries, foreign-invested companies should begin selling low-carbon products, making factories environmentally efficient and helping Chinese suppliers promote low-carbon business activities.

Third, foreign-invested companies should strengthen their cooperation with domestic companies, shifting cooperation from manufacturing to R&D, from hardware production to software designing, from the domestic market to the global market.

Fourth, the companies should make sure their business practices are in compliance with China’s laws and regulations. For many years, several multinational corporations have come to understand and practice corporate social responsibility. Companies should shoulder the responsibility of doing business in accordance with Chinese laws.

Thirty years after China opened up and reformed, the Chinese economy has developed sustainably by letting State-owned, private and foreign-invested companies compete fairly with each other. But China, in order to stimulate economic growth, must give foreign-invested companies equal access to the market.

China should listen to criticism from foreign investors and improve its investments landscape but foreign investors must show patience with China’s investment outlook, which is gradually improving.

The author is the director of the transnational corporations research center under the Ministry of Commerce.

For China Daily

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