By Xu Hongqiang, Research Team on “The Basic Approaches and Major Measures for Going Global in the 14th Five-Year Plan Period”, DRC

Research Report, No.392, 2021 (Total 6457) 2021-12-15

Abstract: During the 13th Five-Year Plan Period, China promulgated a series of new policies for foreign investment to relax restrictions on outbound investment, simplify management of oversea investment, lowered requirements for foreign exchange management of outbound investment, and steadily facilitated foreign investment. However, China’s foreign investment management mechanism is flawed with relatively low reviewing efficiency due to multi-department management, weak follow-up regulation in comparison to strict application reviewing, unsound financial, taxation and information-technology supporting policies as well as public service system, and outdated risk control and insurance system for foreign investment. All these factors have hindered China’s foreign investment growth. Therefore, China needs to reinforce and improve the coordination of policies between government departments for foreign investment, enhance the regulation system and statistics and annual review of foreign investment, and formulate more targeted and effective financial and taxation policies, provide more timely, systematic and comprehensive supportive services by governmental departments, intermediaries, embassies and consulates, and build up overseas risk identification and security capacities.

Keywords: foreign investment, management mechanisms, policy options