Regulatory clarity key to ensuring foreign firms’ understanding of China’s reforms

By Wang Jiamei Source:Global Times Published: 2018/1/30 20:53:40

While the US business community appears more confident about China's further opening-up to foreign investment, it is equally important that the country improves policy enforcement so that foreign companies can truly understand and benefit from China's reform and opening-up.

US companies' optimism about Chinese economic growth is strengthening, with GDP growth projected to be 6.3 percent in 2018, higher than the 2017 estimate of 6.1 percent, according to a membership survey released on Tuesday by the American Chamber of Commerce in China in partnership with Bain & Co.

Some 46 percent of respondents are confident that the Chinese government will further open China's market to foreign investment within the next three years, up from 34 percent in the previous year.

Yet, there are challenges as well, the survey said. Some 75 percent of the member companies continue to feel foreign businesses are less welcome in China than they once were, and 46 percent feel foreign companies are treated unfairly compared with local companies.

For the third year running, respondents continued to cite inconsistent regulatory interpretation, unclear laws and enforcement as the top challenges to do business in China.

Undoubtedly, China will continue its pace of reform and opening-up. The country's top leadership made it clear at the 19th Party Congress that the nation will only become more open. The government also announced in November that it would ease restrictions on foreign investment in a number of sectors in the coming years.

Whether foreign companies can truly benefit from the opening-up dividend will largely depend on the implementation of the relevant policies. Some foreign companies may feel "less comfortable" in China these days, which they often attribute to the increasingly tough regulatory environment or unfair treatment. As the Chinese economy shifts from high-growth to high-quality development, it is inevitable that the government tightens the enforcement of certain regulations and laws to meet the needs of a higher level of economic development.

During that process, inconsistent policy enforcement or misunderstanding may happen in cases involving some companies, especially foreign ones. Therefore, while Chinese authorities strive for the full enforcement of reform and opening-up policies, close attention should also be paid to strengthened coordination and communication with foreign companies to ensure policy clarity and avoid misunderstandings.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON ECONOMY

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