China ministry calls on foreign investors to collaborate with strategic supply chains

But analysts expressed concerns about the long-term viability of this strategy amid rising geopolitical tensions.

Jiangsu province, China’s second-largest economy after Guangdong, called for foreign participation in “strengthening, supplementing and extending industrial chains” in new incentives for foreign capital.

“Foreign-funded enterprises are encouraged to participate in open innovation and development across the biopharmaceutical industry chain and accelerate project implementation,” the Jiangsu provincial government said in a document released last week.

Land use will be prioritized for large projects worth more than $100 million, and visas will be made easier for foreign and multinational executives, engineers and other individuals, he said.

Foreign participation in industrial value chains has been promoted in other regions, but in these cases the intentions have been less clear.

The Guangdong provincial government also issued a document in March 2023 calling for foreign participation in Guangdong’s industrial development.

Peng Peng, executive director of the Guangdong Reform Association, a think tank linked to the Guangdong provincial government, said: “As Western countries control Chinese funds that enter critical supply chains for security reasons, foreign capital is also withdrawing from China. “

“Jiangsu’s efforts to encourage the participation of foreign companies in these critical supply chains have great symbolic weight. This represents a proactive effort to sustain foreign investment. .”

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‘The door on China-US relations will never be closed again’: President Xi Jinping assures US companies

‘The door on China-US relations will never be closed again’: President Xi Jinping assures US companies

He said further observation is needed to determine whether this measure is a temporary stimulus or a long-term change in direction, as both sides balance national security and supply chain interdependence. It added.

“If the ‘decoupling’ strategy takes hold in Western countries, it will be difficult to predict the sustainability of China’s engagement policy,” Peng said.

Confidence among China’s foreign business community is also being undermined by an increasingly unstable regulatory environment.

According to Xu Tiancheng, senior China economist at the Economist Intelligence Unit, China has always had a mixed view of foreign companies, offering preferential treatment in taxes and land, while imposing strict local regulations. It also imposes requirements for

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“Going forward, China will continue to be somewhat selective,” Xu said.

“It will attract investors to industries where it has sufficient influence and where domestic companies are already competitive. Barriers are likely to arise in areas where foreign participation would undermine China’s pursuit of self-sufficiency and supply chain control. It will remain.”

“I hope that the U.S. Chamber of Commerce and its entrepreneurs will continue to serve as a bridge to promote communication and mutual understanding between the two countries,” Li told the Beijing delegation, according to state news agency Xinhua. ” he said.

On the same day, the Ministry of Commerce held a roundtable meeting with foreign companies to solicit their concerns and opinions, particularly regarding the implementation of the 24-point policy directive issued last August with the aim of optimizing the business environment and promoting investment.