China still attractive despite U.S. tax cut

Updated 2017-12-15 09:36:12 Global Times

Nation will open up, improve services for foreign firms

China will further deepen reforms and ease market access for foreign companies to comprehensively implement the management system for pre-establishment national treatment as well as a negative list, a Chinese trade official said Thursday.

The comment came amid rising public concerns that the recent U.S. tax cut might divert capital away from China.

Tax policy plays a vital role in affecting companies' investment decisions, but it is not the only factor, Gao Feng, spokesman for China's Ministry of Commerce (MOFCOM), said at a regular press conference.

"Other elements, including macroeconomic stability, market potential, production factors and the business environment, should also be taken into consideration," he noted.

China has improved its industrial chains, raised the number of trained workers and has a consumption market with large growth potential, while the country's economy is maintaining its medium-to-high-speed growth, Gao noted.

"We are stepping up efforts to optimize the investment and business environment and reduce access barriers for foreign capital," he said.

In June, MOFCOM and the National Development and Reform Commission, the country's top economic planner, released the 2017 Catalogue for the Guidance of Foreign Investment Industries, in which more than 30 investment restrictions were cut.

"We have confidence that China will continue to be an attractive investment destination," Gao said, adding that China's opening-up will continue, through efforts such as further reducing market restrictions and improving services for foreign-invested enterprises.

Foreign direct investment into China rose 9.8 percent year-on-year to 803.62 billion yuan (1 billion) in the first 11 months of this year, MOFCOM data showed. A total of 4,641 foreign-invested enterprises were set up in China in November alone, up 161.5 percent on a yearly basis, said the ministry.

The US tax reform has drawn attention from around the world, and the tax policy, combined with previous interest rate hikes by the US Federal Reserve, will affect global capital flows to some extent, Gao conceded.

"We have noticed that some economies have already tightened monetary policies, and have started or are planning to announce tax cuts," Gao said, noting that some economies, emerging ones in particular, are concerned that the US tax reform will cause capital outflows and make it hard for them to attract foreign capital.

"We hope that such concerns will prove unfounded… The growth of the world economy needs strengthened and joint policy coordination from economies across the globe," Gao said.

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