Dispatches From China

China enacts new foreign investment rules

On April 13, China’s State Council issued new guidelines for foreign investment in China. The new rules were reported in People’s Daily as well as the other official news organs of the Chinese government.

Since then, businesses have been trying to decipher the new policy, which is long on general goals and short on the specific procedures to achieve them.

The consensus seems to be that China is taking a quality-over-quantity approach in the major cities, which emphasizes attracting foreign direct investment in higher-margin businesses and discouraging those enterprises with significant environmental footprints.

In the poorer and less developed western regions, China is now giving local governments the direction and ability to attract labor-intensive, lower-margin business, apparently in the hopes that the energy which propelled the major costal cities will serve as a development model for these unknown cities.

Read more here.

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