China’s vows to support inbound investment fail to convince foreign firms already in the country, survey finds

As the world’s second-largest economy emphasises self-sufficiency, concerns are rising that inward-looking priorities undermine Beijing’s commitment to open up

From development-zone restrictions to environmental-protection policies, foreign investors lament ‘noticeable problems in recent years’

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China has a number of economic-development zones, including here in Yiyuan county, Shandong province, that have long served to bolster foreign direct investment. Photo: Xinhua

Published: 4:00pm, 21 Oct 2022Updated: 4:04pm, 21 Oct 2022

Beijing’s overly “draconian” strings attached to investment policies, while giving the cold shoulder to existing foreign investors in China, threaten to undermine its goal of drumming up more inbound investment, according to a survey from an independent multinational think tank.

The findings come as Beijing emphasised this week, during its 20th party congress, that China remains committed to further opening up – a commitment made amid growing concerns that the world’s second-largest economy is becoming more inward-looking, with security and self-reliance moving higher on the agenda of policymakers.

Multiple foreign firms with extensive experience operating in China have become convinced that the country has not fundamentally changed its policy on opening up and will not do so, according to field research conducted by Anbound, headquartered in Beijing.

“During their operation and development in China, foreign investors have still faced some noticeable problems in recent years,” the firm’s researchers warned on Tuesday.

A major complaint was that China had selected only part of its sectors to open to overseas investors, while imposing ill-advised restrictions in economic-development zones, the report showed.

China’s economic-development zones have served as gateways into the country since the late 1970s, wooing foreign direct investment with preferential business policies that differ from those governing the country as a whole.

“All of the development zones in China have investment guides when attracting investment, but these guides have too many requirements and are sometimes too draconian,” the researchers wrote.