Premier urges foreign firms to reinvest in China

By Li Qiaoyi in Dalian Source:Global Times Published: 2017/6/27 23:53:39

New tech, business models contribute 70% of new urban jobs

Chinese Premier Li Keqiang on Tuesday urged foreign companies to reinvest their earnings in the country, encouraging them to explore growth opportunities in the reform-bound and innovation-oriented Chinese economy.

Foreign companies that have long invested in China will find the country the best investment destination, Li said in a keynote speech at the opening ceremony of the World Economic Forum "Summer Davos" in the coastal city of Dalian, Northeast China's Liaoning Province.

They [foreign firms] are immersed in China's economic development and have developed strong localization capacities, and "if [they] reinvest their earnings in China, they stand to generate even more," he said, pledging not to impose restrictions on cross-border earnings transfers.

The country supports the setting up of regional headquarters by multinational corporations, and will guide foreign investment toward the western part of the country and the old industrial base of Northeast China where there are great potentials, Li added.

Foreign direct investment in China fell 3.7 percent in May to 54.67 billion yuan ($ 8.05 billion) from the same period last year, the Ministry of Commerce said. In the first five months, foreign investment into the country shrank 0.7 percent on a yearly basis.

The pitch seems to have been well received. "The [Chinese] market is very strong. It's a big market with opportunities, and we will continue to invest in it," Girish Ramachandran, head of the Asia-Pacific region of Tata Consultancy Services, India's largest IT services firm, said in an exclusive interview with the Global Times on the sidelines of the forum.

Opening the door wider to foreign investments is part of broad-based efforts to deepen economic reforms aimed at rebalancing the world's second-largest economy, regardless of downward pressure, market watchers said.

"China's economy is shifting toward consumption- and technology-driven engines instead of manufacturing and exports," Stephen Creamer, director of the Air Navigation Bureau of the Canada-based International Civil Aviation Organization, told the Global Times on Tuesday.

Li also said "domestic demand has become an outstanding pillar" of the economy.

The country hasn't flooded its economy with strong stimulus measures in recent years, but has continued restructuring efforts, he said, vowing to continue wide-ranging reforms, such as tax and fee cuts. On top of that, Li said new dynamics are making an increasing contribution to the economy and fueling growth.

Big data, which is at the core of the digital economy and considered a vital component of new dynamics, is creating huge job opportunities around collecting and sorting data, Sun Pishu, chairman of Inspur Group, China's largest server maker, told the Global Times on Tuesday.

Looking ahead, as the economy relies more on innovation, a new business model is in the making with big data transaction makers overshadowing online merchants, Sun said.

"A lot of new technologies are sprouting out of China, not only products but also software and services," John Kilmartin, executive director of the Bahrain Economic Development Board, told the Global Times.

It's also believed that fears that robots would replace human workers are baseless.

Li said new dynamics - emerging industries and business models - contributed roughly 70 percent of China's new urban jobs last year, adding that new technologies and business models, such as online shopping and bike-sharing, created more jobs than those replaced by robots.

Along with encouraging signs of economic rebalancing, challenges continue to face the economy. But Li said that while there are risks in the financial industry, China has the capacity to prevent systemic risks.

He reiterated that risks are manageable and the economy won't experience a hard landing.

Li Xuanmin contributed to this story


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