China Vows Better Business Environment for Foreign Investors

January 21, 2013 Posted by China Briefing Reading Time: 3 minutes

Jan. 21 – At a China Association of Enterprises with Foreign Investment (CAEFI) meeting held on January 14, Chen Deming, China’s Commerce Minister and the president of CAEFI, pointed out that there is great development potential in the country’s environmental protection industry, ecological industry, and in small and medium-sized town construction, all of which will help generate new business opportunities for foreign investors.

According to Chen, the economic outlook for China in 2013 is generally positive – domestic consumption and investment will maintain steady growth levels, and the scale of FDI into the country in 2013 is likely to maintain the same levels seen in 2012 despite some uncertainties.

FDI into China fell by 3.7 percent in 2012 from a year earlier to US$111.7 billion, the first drop since the 2009 Global Financial Crisis.

Specifically, FDI inflows to the country’s manufacturing industry decreased by 6.2 percent to US$48.9 billion, which is partially due to rising operational costs in the mainland. Some foreign companies in China involved in labor-intensive industries have already begun to look for opportunities in cheaper emerging economies, such as Indonesia, Thailand and Vietnam.

Shen Danyang, spokesman for China’s Ministry of Commerce, admitted that some manufacturing companies are moving out of the country, but not in a big way, and many international companies still remain upbeat about China. However, he acknowledged that China needs to try harder to attract foreign investors.

Chen promised that the Chinese government will continue to improve its investment environment and encourage foreign investors to invest in the country. This will be accomplished, in part, through introducing measures that offer greater IPR protection and help promote the use of legal software.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email asia@dezshira.com, visit www.dezshira.com, or download the company brochure.

You can stay up to date with the latest business and investment trends across Asia by subscribing to The Asia Advantage, our complimentary update service featuring news, commentary, guides, and multimedia resources.

Related Reading

An Introduction to Doing Business in China
Asia Briefing, in cooperation with its parent firm Dezan Shira & Associates, has just released this 40-page report introducing everything that a foreign investor should be familiar with when establishing and operating a business in China.

The Asia Tax Comparator
Here we discuss corporate income tax, value-added tax, business tax, goods and service tax, withholding tax, and individual income tax as these apply in China, India, and Vietnam, and in the popular holding company destinations of Hong Kong and Singapore. This includes tax rates, descriptions, incentives, and deadlines, as well as main FDI source countries/regions and industry-specific notes.

Are You Ready for ASEAN 2015?
In our first ever issue of Asia Briefing Magazine, we focus on the new dawn that ASEAN free trade brings to the entire region, as well as the dramatic added impact of pan-Asian free trade agreements such as the Regional Comprehensive Economic Partnership.