China plans new rules on market access, data flows

FILE PHOTO: Chinese Premier Li Qiang and French Foreign Minister Catherine Colonna (not pictured) attend a meeting at the Great Hall of the People in Beijing, China on Nov 24, 2023. Jade Gao/Pool via REUTERS/File photo

BEIJING — China will carefully study issues of market access and cross-border data flows and will soon issue new regulations in these areas, Premier Li Qiang told an audience of global CEOs and Chinese policymakers on Sunday.

“We cordially welcome companies from all countries to invest in China and deepen their foothold in China,” Li said.

China is also pushing to develop emerging industries such as biological manufacturing and will step up development of artificial intelligence and the data economy, Li told the China Development Forum in Beijing.

Beijing on Tuesday eased some rules on foreign investment, after investment inflows shrank nearly 20 percent in the January-February period. China’s cyberspace regulator on Friday relaxed some security rules on data exports that had worried foreign firms in China.

READ: China vows to open manufacturing to foreign investors

China’s inflation rate and the central government’s debt burden are relatively low, leaving room for further macro policy steps, Li told the two-day forum. He pointed to measures China rolled out last year to defuse property and debt risks, which he said have been effective.

Li cited 1 trillion yuan ($140 billion) in previously announced ultra-long special treasury bonds, which he said will spur investment and stabilize economic growth.

China faces headwinds

China’s $18 trillion economy, the world’s second-largest, faces headwinds including a property crisis, local government debt woes, industrial overcapacity, deflationary risks and cooling foreign investment.

Organized annually by Beijing since 2000, the high-level forum is an opportunity for global CEOs and Chinese policymakers to discuss foreign investment. Regular attendees include Apple CEO Tim Cook and Bridgewater Associates founder Ray Dalio.

READ: China’s pitch to foreign investors falls flat as incentives dwindle

Li does not intend to hold a meeting with visiting foreign CEOs at this year’s forum, Reuters reported last week. But the Wall Street Journal reported on Thursday that President Xi Jinping plans to meet a group of U.S. business leaders on Wednesday after the conference, in a sign that Beijing still wants to woo American firms amid rising foreign capital outflows.

Overseas firms have been souring on China after it abandoned its ultra-strict COVID curbs in late 2022, due to concerns over the business environment, economic recovery and politics.

A new action plan to arrest a slowdown in foreign investment aims to create a level playing field for foreign firms, lift curbs on overseas access in the country’s sprawling manufacturing industry and promote the expansion of areas such as telecommunications and healthcare.

Although the economy started the year on a solid footing, analysts have described Li’s annual growth target of around 5 percent as “ambitious” given the property crisis and tepid household consumption due to sluggish income growth and uncertainty in the job market.

($1 = 7.2293 Chinese yuan renminbi)