After experiencing a sharp decline in foreign direct investment ( FDI), China has made the decision to open up its telecommunication, educational, and healthcare services sectors to foreigners.  ,
On Monday, a conference of the State Council headed by Chinese Premier Li Qiang reviewed and approved four papers that aim to aid the nation in attracting foreign investment.
The documents include the 2024 model of a set of specific operational measures, or a bad list, for international investment entry. China will further relax restrictions on foreign funding, as suggested by the bad list, by removing all barriers to entry to manufacturing and accelerating the expansion of sectors like telecommunications, education, and health care.
” The latest State Council administrative meeting decided to improve the country’s services industry by encouraging the cross-border flows of necessary resources such as talent, capital, technologies and data”, Zheng Wei, a researcher with Shanghai-based China Outsourcing Institute, a research unit operating under the Ministry Commerce, told the Economic Information Daily in an interview.
” The opening up of the communications, education and healthcare areas, which are fairly delicate business, demonstrates China’s resolve to proactively open up its business to the world”, Zheng said. China may take more drastic measures to boost its opening and boost foreign investors ‘ trust in the nation in the future.
When China began to open its market in the 1980s, it first relaxed restrictions on foreign investment in its production industry.  ,
International businesses in the automobile industry had to form 50-50 joint ventures with Chinese companions to operate their businesses there. However, this limitation has been lifted since 2022.  ,
For national security reasons, China has never opened up its telecom, education and healthcare service sectors, which are still controlled by state-owned-enterprises ( SOEs ). Beijing is anticipated to gradually comfortable regulations in these sectors.
China has no plan to open up its defence, energy and internet companies in the small or medium name, according to most watchers.
FDI and employment
The State Council’s latest decisions came after China’s FDI fell 29.1 % to 498.9 billion yuan ( US$ 69.5 billion ) in the first half of this year from a year ago.  ,
China’s overseas direct investment ( ODI) increased by 16.6 % to US$ 72.62 billion as many Chinese manufacturers had to expand their production overseas in order to lower costs or avoid new tariffs imposed by the West.  ,
China needs to increase its international funding because its job market has n’t yet provided ample opportunities for younger people.  ,
According to the National Bureau of Statistics ( NBS ), China’s youth unemployment rate increased to 17.1 % in July, the highest level since the new system of record-keeping began last December. In June this year, the number was merely 13.2 %.  ,
In June 2023, the youth unemployment rate reached a record high of 21.3 %, said the NBS.
China had been halting accounts of its children unemployment rate for the majority of the second quarter of 2023. It stated that its procedures for calculating were being revised. In February this time, the NBS said the children work level, calculated with a new approach, was 14.9 % for last December.
Up until a considerable increase in July, the figure had been floating at about 14 % in the first quarter of this year. According to Chinese authorities, the rise was attributed to a rise in the number of recent graduates in the summer.  ,
Praising Deng once?
A five-year program that aims to modernize Chinese companies and advance economic reforms was adopted on July 18 as the 20th Chinese Communist Party’s Central Committee’s next plenary session came to an end.  ,
CCP General Secretary Xi Jinping stated on July 30 that the Chinese economy is “facing more adverse effects from changes in the external environment while effective domestic demand remains insufficient.”
In a letter on the same day, Xi also demanded from Hong Kong businesspeople to encourage investment in mainland China and support the country’s reform and expansion. However, Hong Kong tycoons ‘ responses have remained lukewarm so far.  ,
The official theoretical journal of the CCP, Qiushi, published two articles on August 16 to thank former Chinese leader Deng Xiaoping for his contributions to the reform and resurgence of the Chinese economy in the 1980s.  ,  ,
The two opinion pieces also said Deng had stabilized China’s relations with the United States, Soviet Union, Japan and Britain.  ,
The two Qiushi articles are intended to use Deng’s reputation to unite the CCP, which is currently led by Xi, according to a comment from Ming Jing News, a Canadian-based Chinese news website. The article’s authors claimed that because they only serve as reminders to party members to support Xi’s economic reforms, they are not politically incorrect.  ,
Capital outflow
Beijing wants to attract foreign investors to boost its FDI, as well as take steps to prevent any panic-selling in Shanghai and Shenzhen stock markets. China has stopped releasing daily data on overseas fund flows starting on Monday.  ,
Chinese officials had already made hints in April that they would reduce real-time information on northbound foreign funds moving from Hong Kong to the stock markets of mainland China. They made the choice at the end of July.  ,
Some analysts believe Beijing intends to lessen the high-frequency data-induced market volatility and shift investor attention to longer-term indicators, such as the People’s Bank of China’s quarterly reports on financial assets held by foreign entities.  ,
They claimed that the move will reduce China’s cross-border capital flow transparency and that it will not address the root of the issue, which was brought on by global investors ‘ shaky confidence in the Chinese economy.
Chen Hongbing, the chairman of Anhui Meitong Asset Management Ltd., stated to Taiwan’s UDN.com that investors view the daily data of northbound fund funds as an indicator of overall market sentiment. He claimed that stopping the release of the data might help to stop speculative activity and lessen market volatility.
Some individual investors feel unfair that brokerage firms can still use their own data to monitor and forecast market trends while they ca n’t access real-time data right now.  ,
Read: Property crisis still haunts China investment, consumption
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