According to a report from the Wall Street Journal,"The Communist Party’s reform blueprint had something for everyone – even foreign investors.
The document it released on Friday offered up a long shopping list of industries it said it would open up to foreign investment. Many are in areas where the U.S. has been agitating for greater access for years".
According to the blueprint, Beijing will “promote the orderly opening up” of the finance, education, culture and health sectors. Restrictions on investing in child care and elder care, construction and design, accounting and auditing, logistics and e-commerce will also be relaxed, as will limits on market entry for manufacturing.
Foreign financial firms have been limited to minority stakes in their Chinese counterparts of years. For example, a foreign firm can hold more than a 20% stake in a Chinese bank or trust company.
Of course, it remains to be seen what greater access looks like. Over the last couple of years Beijing has been moving to scale back foreign involvement in the accounting and auditing industry, and it seems unlikely to change course despite the blueprint saying accountancy will be more open to overseas investments.
But there is also increasing recognition in Beijing that many of the service areas where foreigners have been kept at arm’s length also require more capital and expertise. With an aging population, the country’s creaking health-care system needs a dose of best practice. Similarly,better logistics are need to help connect China’s hinterland provinces with export markets, and ensure the more efficient transfer for food and resources.
China is currently in talks with the U.S. to sign an investment treaty, an idea that the U.S. tried to promote years ago with no success. Recently the Chinese resurrected the idea, and made it a key part of talks with the U.S.
Central to the investment treaty is a negative list, which should free up the scope of U.S. companies to invest in China. China is hoping to use the treaty as a way of using an international commitment to drive domestic reforms, much in the same way that China’s accession to the World Trade Organization in 2001 helped spur the country’s economic opening.
