42015590 - Horizons Q2 2022_v06

ISSUE 2 | 2022


will need to continue to improve its business environment. This will include more consistency in its economic policies and even stronger intellectual property protection and trade dispute resolution mechanisms.

1. The limitation on foreign shareholding ratio and joint venture numbers in the motor vehicle manufacturing sector will be cancelled; 2. Foreign financial firms can take controlling shares in existing joint ventures or open new wholly foreign- owned firms; 3. Foreign capital will be allowed in satellite TV and the manufacturing of key components businesses; and 4. The investment limitation on (i) corn agriculture; (ii) the publishing industry; (iii) Chinese medicine manufacturing; (iv) entertainment; and (v) the market research sectors in the Pilot Free Trade Zone will all be relaxed. In the near term, it is expected that China will face slowdowns in exports and supply chain disruptions amid the Ukraine war crisis and the recent pandemic lockdowns in some major Chinese cities in March 2022. Nonetheless, China’s continued relaxation on foreign investment will continue to bring investment and development opportunities to foreign enterprises. In order to align with the global post-pandemic economy recovery and attract more foreign capital, China

was mainly due to the relaxation of the foreign investment policy and an improved domestic business environment in China. According to data released by the NBS in March 2022, investment in manufacturing surged 21% during January-February 2022 from a year ago, faster than the 13.5% y-o-y growth recorded in the same period in 2021. China has continued to boost its spending on infrastructure, with many local governments kicking off significant

projects in areas such as electric mobility and semiconductors.

CONTINUED RELAXATIONOF FOREIGN INVESTMENT POLICY In 2022 China has continued to liberalize its business environment for foreign firms by cutting the number of sectors and industries that were off limits to both Chinese and foreign investors i.e. on its negative list for market access. The latest 2022 list of restricted or prohibited industries have been cut to 117 from 123 on the 2020 list, according to the National Development and Reform Commission. The major changes in China’s 2022 negative list are as follow:





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