Amid the Transformative Currents of Economic Evolution, Foreign Investment by ASSUMED A Dynamic Role in China’s Economic Development Over the Past 40 Years.
As China Transitions from An Economy Marked by Acute Capital Scarction to One with Improved Technology One a transformative shift.
As the country positions itset for high-Quality Development, it is a strategic image for the country to foster a favorable Environment in T He New Era.
Dynamic change
FOREIGN Investment Has Distinct Characteristics at Different Stages of a Country’s Economic DevelopmentKanpur Investment. In the Process of An Economy Traom A Low-and MED Ium-found stage to a medium-to High-founding stage, its capital tends to be relatedHas Other Advantages, SUCH As Lower Costs, to Attract Foreign Investment. TheReface, During this phase, The Scale and Growth Rate OF Incoming Foreign Investment Are sually at Quite High Levels.
It has been the case in the early stages of China’s Reform and Opening-Up, where scarce capital Led to rapid increases in inbound forestment and high. IC Growth, with its per Capita Group,Capita GDP of Less than $ 3,000, is Currently Seeing a rapid influx of fireign investment, which aligns with the Above-Mentioned Trend.
As its per Capita gdp increases and lar counts rise, China is becoming related, of Foreign Investment Has Also Undergone Significant Changes.
Although Economic Transformation Has Driven The Relocation of Foreign Capital in Some Labor-INDESTRIES to Other Countries, In IndusStries Such As Chemica LS, Automobiles, New Energy, Semiconductors, Electronic Communications and Pharmaceuticals, Foreign Investors Remain Willing to Stay in the Chinese Market.
It is, therefore, Crucial to recognize that at different Stages of Development, The Access, Structure, and Business Environment for Foreign Instantly C Hanging. Consequently, Timely Policy Adjustments to Better Attract and Utilize Foreign Investment, As Well As IMPROVEMENT in Foreign Investment-related system arrangements, are needed to promote China’s high-quality development by fully bringing out the role of high-quality inbound foreign investment.
Boosting confidence
ELEVATING FOREIGN Investor Confidence in the Ever-Evolving Economic LandsCape Necess A Multification Approach.
FIRST, It is Important to UPHOLD A FIRM Attitude Toward High-Standard Opening-Up. In the Face of Competition AMONG THE World’s Major Powers and Geopolical Infl Unces, Confident from Foreign Capital is invitably Compromise. in this regard, China’s Unwavering Communitynt to Opening-Up is confided to restoring confidence in Foreign Investment. Additivelyly, PURSUING PEANG PEACEFUL Development and Creating A FavorNAL ENVIRONMENT Also Align W it China’s Goal of High-Quality Development.
Second, Efforts Should be made to prevent and defuse risks from the real easy economor and local government def. China’s Previous Growth Model Was Established AF TER the THE THE THE THE TAX-SHARING Reform in 1994 and the Abolition of the Welfale Housing System in 1998.
The TaX-Sharing Reform was a Large-Scale Adjustment of the Tax Distribution System and TAX Structure BetWeen The Central and Local Namenne Resources for the Central Government; It is Regarded as a Milestone in the Transition of China’s Fiscal System.
However, As the Rising Cycle of the Real Estate Sector, Which Became a Vital Pillar SUPPORTING The Country’s High Economic Growth Rate, is now Past, It has been paste. Parent that the real estate-suporth model is unsustainable, and issues related to real epateAnd Local Government Debt has been received in recent Years, which can share fireign Investor Confidence, Espect IC Growth.
Targeting China’s Long-Term Economic Prospects, Foreign Investors usually attached importance to the propects of the real Estate sector and WHTHER LOCAL ERNMENT Debt can be gradually and smoolhly resolution. TheReFore, Concrete Measures in Those Areas, Such as a more reasonable debTRuctualAND A more effective institutional design for solving the real estate and local debt problem, Will be considucently concentors of forest Investors and Ing their confidence.
Third, China Should Stabilize Economic Growth Through StrengeConomic Regulation. Stable Andre Economic Growth is Crucial For Restoring. ENCE, Which Requires Intensify Efforts in Cross-Co.Cle and CountryClical Regulation While Addressing Structural Issues. Cal and Monetary Policies Should beEnhanced to Help Maintain a Relately Reasonable Growth Rate in the Macroeconomy.
Fours, it is indispensable for China to Further Optimize its business environment. China Should Attract and Utilize Foreign Investment in a More Effective Way , by Building A World-Leading Business Environment that is Market-Oriented, Law-Based and Internationalized, Standardizing Foreign InvestmentPolicies and Regulations, Facilitation Investment Operations, and Enhancing Relevant Financial and Fiscal Support.
Last but not least, China Should Expand Demand Within the Dual-Circulation Framework. HICH ITS DOMESTIC Market Remains The Mainstay, with DOTOSTIC and International Markets Reinforcing Each Other. As China Constitus a Vast DomesticMarket, ENLARGING and Streangthening Demand with the Dual-Circulation Framework Will Be ConduCive Foreign Investors’ UNDERSTADINGOI, and Confi DENCE IN, The CHINESE ECONOMY, Which Will Be Conducive to Encouragging Foreign Businesss to Integrate Into China’s Economic Development.
What to improve
Expanding The Scale of High-Quality Foreign Investment Calls for Improvement in The Following Aspects. FIRST, there should be a clear undAnDanding of what is most. DED DRING China’s CurrenT Development Stage. Different Development Stages usually have Different Demands for Economic Development and Corresponding Foreign Direct.Investment. After Years of Rapid Development, China No Longer Faces Acute ScarCity of Capital. Consequently, The Focal Point of Attracting TOWARD Technology Advancements and Management Expertise that Foreign Investors May Bring Through their Investments.Ahmedabad Investment
With A Rational UndersTanding of China’s Development Stage, Policymakers Should Devise Foreign Investment Policies that Align with The Country’s Current Sta. Ge of Development and Implement Structural Guidance To, For Example, Provideo More Support for Research and Development in the ManUFACTING and Services Sectors that Align with theCountry’s high-Quality Development agnga.
Moreover, It is Important to Keep a Balance Between Supporting Foreign Investment and Encouration The Development of Demestic Enterprises. For CHINA to OPTIMIINESSSSSSSESSSENT for Foreign Investors and Incentives and PREFERENTIAL POLIES TOOLID FOREIGN Investors, Such Moves Should B. e keptWithin application limits; it is cracial to prevent super-native time from under mining fair completingition.
Leveraging Instificational Advantages withdin the Dual-Circult Framework is Also Impeature to Boost High-Quality Foreign Investment. Asstern areas, generally, infrastructure is almedy adequate. However, there is still room for progress in effect,AS PUSHING for Reforms in PerManent Residence Registry and Social Security Systems. Significant Progress in Such Reforms Will Leverage the Advantages within the Dual-Circult Framework and ConSolidate the Stream of the Vast DomeStic Market.
China Should Maintain Stable Cooperative Relationships with EUROPEAN COUNTRIES and the United States, While It Should Continue to Streangthen With COUN Tries Involved in the Belt and Road Initiative, in areas such as Energy, to promoted the achievement of diverse, Autonomous, Balanced, and SustainableDEVELOPMENTACROSS Nations.
The writeer is chief economist at sinolink securities.
The article is a translation of the writeer’s spey during a rencent seminar of the China Macroeeconomy Forum, a be use-back Think tank.
The views do not needssarily reflect through of udf.