Since China's central government issued guidelines on further opening up the domestic market and expanding the use of foreign capital, a slew of provincial governments have followed suit by introducing new policies to extend market openness on the local level. However, challenges still remain for increasing foreign capital in China, especially given the declining competitiveness in labor costs and other areas.
In Shanghai, foreign capital is welcome in financial, Internet, cultural and few other sectors. In East China's Jiangsu Province, the government wants to further open up the services sector to foreign investors. In Southwest China's Sichuan and Central China's Henan provinces, foreign involvement in high-end manufacturing is encouraged.
Those are just a few of China's provinces, regions and municipalities that have issued their own policies regarding the expansion of their local markets to foreign investors, following similar measures taken by the central government.
China has made further opening up the domestic market to foreign investors a top priority in recent years and recent actions from the provincial-level governments have shown that national effort is gaining footing on the local level, albeit challenges in driving up the number of foreign firms and capital are evident, experts have since pointed out.
Since the State Council, China's cabinet, in January issued a list of measures to expand the use of foreign capital, nearly a dozen provincial level governments have released similar policies, according to a report published by the Beijing-based Economic Information Daily on Tuesday.
In addition to Shanghai, Jiangsu, Sichuan and Henan, Central China's Hubei Province, East China's Fujian Province and South China's Guangxi Zhuang Autonomous Region are among the provinces, regions and municipalities that have adopted local policies to expand market openness, according to the report.
National strategy, local focus
The contents of the local governments' policies are largely in line with those listed in the State Council's document.
For example, provincial governments, in their own policies, focus on areas such as expanding market access for foreign capital and improving policies and measures in handling foreign investment, therefore creating a fair environment for foreign investors. These policies were also listed in the State Council's document.
Local governments also followed the central government in determining industries in which they plan to further open up for foreign investors.
For example, many of the provincial governments focus on further advancing the services and manufacturing sectors, both of which were highlighted by the State Council as key areas due for new rounds of expansion. But some local governments place special focus on some specific areas.
Sichuan's focus on attracting foreign companies in manufacturing is in line with the province's overall goal to develop a top high-end manufacturing base in western China under the "Made in China 2025 Sichuan Action Plan."
In guidelines issued by the provincial government on June 2, Sichuan said it would provide the same policy support for both foreign and domestic companies in manufacturing. The guidelines said the province will encourage foreign investment in high-end manufacturing, smart manufacturing and green manufacturing.
Some local governments also vowed to further expand market openness on top of the central government's plan. Shanghai expanded areas in the services sector based on the State Council's expansion list.
In addition to opening up accounting, auditing, ratings and other services, as designated by the central government, Shanghai also plans to open up services in telecommunication, Internet, cultural, shipping and other areas to foreign investors, according to a document published on the municipality's official website on April 26.
Experts say each province has its own advantage and could try to expand market openness in different areas.