The interpretation of the Implementation Opinions of Suzhou on Practicing the Policies for Expansion of China’s Opening up to the Outside World and Active Utilization of Foreign Investment (No.68 [2017] of the Suzhou Municipal Government, hereinafter referred to as “the Implementation Opinions”) is as follows:
1. Background
1.1 A mobilization order on further utilization of foreign investment was issued by the State. The utilization of foreign investment constitutes an important component of China’s basic state policy of opening up and an important part of the open economic system, which has played an active role in the process of economic development and the reform deepening. At present, the world economy is undergoing profound adjustment, the recovery of which lacks drive and international capital flows slow down; China’s economy has entered a period of new normal, thus more attention should be paid to the transformation of the development pattern, the growth model and the driving force for development. Internal and external environments for utilizing foreign investment have undergone profound changes. The State Council published the Notice on Several Measures for Expansion of China’s Opening up to the Outside World and Active Utilization of Foreign Investment (No.5 [2017] of the State Council) in January, and issued a work order to promote the utilization of foreign investment. In keeping with the principles of the document No.5 issued by the State Council, Jiangsu provincial government published the Opinions on Several Policies for Expansion of China’s Opening up to the Outside World and Active Utilization of Foreign Investment (No.33 [2017] of the Jiangsu Provincial Government) in March. Based on its cultural background, Jiangsu provincial government took targeted measures to guide local cities to strengthen the utilization of foreign investment.
1.2 Meeting the actual demands of Suzhou to utilize foreign investment. The use of foreign investment has long been a driving force and an major advantage for Suzhou’s open economy and has played an important role in economic and social development of the city. In recent years, the environment and conditions of using foreign investment has been changed dramatically and the pressure to ensure a stable growth of foreign investment has increased. Stage characteristics including the slowdown of scale expansion, optimization and updating of foreign investment structure and a prominent bottleneck restriction on resource elements are obvious. Special policies at the local level are urgently to be implemented so as to ensure a sustainable foreign investment and make better use of foreign investment.
1.3 Conforming to the evolution of local foreign investment policies. Suzhou Municipal Committee of the CPC and Suzhou Municipal Government paid high attention to the optimization of policies by utilizing foreign investment. In 2016, Several Opinions on Attracting Business and Investment (No.282 [2016] of the Suzhou Municipal Government Office) was unveiled. It put forward practical guiding opinions to the overall work of the municipality on attracting business and investment in many aspects, such as enhancing ideological understanding, focusing on main fields of investment invitation, innovating manners of inviting investment, promoting functions of the platform, improving the service support capability, coordinating investment resources, optimizing performance appraisal and work motivation, raising market operation level and accelerating the building of talent teams. With emphasis on the content of the No.282 [2016] of the Suzhou Municipal Government Office, the release of the Implementation Opinions conforms to the development of policy supply and takes measures successively in order to create a good ecosystem for the development of foreign investment.
2. Targets and Tasks
Based on the current situations of municipal open development and foreign investment, the Implementation Opinions sticks to the principle of problem orientation and concentrates on relatively weak links in business environment and the promotion of work. It aims at effectively strengthening the guidance and promotion of the utilization of foreign investment in different areas through faithfully carrying forward the No.5 [2017] of the State Council and the No.33 [2017] of the Jiangsu Provincial Government.
In the aspect of strengthening the guidance, the Implementation Opinions highlights the fair implementation of stock policy, emphasizes on fair and comprehensive implementation of the local policy on foreign main bodies, promotes effectively the majority policies of the national and provincial documents to be put into effect in our city. The document lays emphasis on referencing the optimized new policy, and on the basis of borrowing the newly issued analogous policies from 20 provinces and cities, it gives attention to both the stage character of development of local foreign capital and resource conditions. It strives to create environmental advantages of open development, focusing on absorbing the duplicable elements in regulatory regulation, business environment optimization, accumulation of multiple elements and innovative institutional mechanisms and other aspects,.
In the aspect of effective incentives, the Implementation Opinions seeks innovation incentive policies. In the introduction of capital of strengthening incremental foreign investment, the document focuses on enhancing the evaluation and stimulation in attracting foreign business and investment. It supports and encourages sufficiently the local independent innovation in promoting foreign investment, in favor of all regions and all kinds of national development zones formulating and issuing the investment preferential policies within the policy permitting and statutory limits.
3. Main Part
The Implementation Opinions is divided into 3 parts and 23 articles in all:
Part One: Create a new growth pole in foreign investment. It reflects the guidance of foreign investment and the equal application for foreign capitals and overseas entities as regard to those relevant policies and measures in manufacturing industry, service industry, scientific and technological innovation, headquarters economy and talents recruitment in order to positively cultivate the new momentum for foreign investment.
Part Two: Take a further step to create the market environment with fair competence. Targeted initiatives have been put forward in order to optimize and promote the ecological environment for foreign investment, which includes constructing a fair competition system, opening up the equal participation of foreign investment in government procurement, encouraging foreign-owned enterprises to participate in public projects, strictly protecting the intellectual property rights of foreign-owned enterprises, reducing the operating costs of foreign-owned enterprises, broadening the financing channels for foreign-owned enterprises and improving the management of foreign exchange and foreign debt .
Part Three: Comprehensively promote the investment invitation in the new era. Policy contents are proposed concerning completing the system to strengthen the responsibility undertaking, reinforcing the supply of project policy, exploring market-oriented investment and operation, deepening the construction of investment promotion, platform and carrier, optimizing project landscape and political affairs service, improving supervision, enhancing investment team construction, intensifying the system of work evaluation and incentives, building a close as well as clear bond between political and business elements.
4. Applicants
The Implementation Opinions covers about 40 existing policies which empower various groups to apply for the prescribed benefits, including foreign investors, project organizations, foreign-invested enterprises and teams of innovation and start-ups overseas. Local governments at the municipal and district level (especially the Administration Committee) as well as other related departments, are partly considered in these policies also.
5. Operation Methods
In response to the assessment and incentive measures for utilizing foreign capital in cities and districts proposed in the Implementation Opinions, the Municipal Bureau of Commerce will work out detailed implementation rules with the Municipal Bureau of Finance to put it into effect. Other involved policies are carried out by the policy making department in accordance with relevant rules and regulations.
6. Keywords Explanation
(i) Notice of the State Council on Some Measures for Enlarging the Scale of Opening-up to the Outside World and Actively Utilizing Foreign Investment (No.5 [2017] of the State Council). This document was issued by the State Council in January this year, which mainly focuses on three aspects to promote the use of foreign investment: opening up to the outside world with a high level, creating a fair competitive environment, strengthening investment invitation from overseas and so on. Among them, the first two are large in length, representing the purpose of optimizing foreign investment at the national level.
The document addresses China’s policy orientation of utilizing foreign investment at present and in the future, putting forward 20 specific measures. First, further expand opening up. It proposes to relax restrictions on access to foreign capital in services and manufacturing sectors. The strategic policies and measures of “Made in China 2025” are equally applicable to foreign-funded enterprises. The document also encourages domestic and foreign-funded enterprises and research institutes to cooperate in researches and high-level overseas talents to start their own business in China. Second, further create fair competition environment. It requires all localities and departments to review the business license and qualification applications in accordance with the same standards for foreign-funded enterprises. The document also entails equality when foreign-funded enterprises involved in foreign China’s standardization work and government procurement and strict protection of foreign intellectual property. Third, further strengthen the work of attracting foreign investment. It proposes that all localities should actively carry out investment promotion activities, and allow local governments to formulate preferential investment promotion policies within the statutory authorities’ limitations. The document also supports land for foreign-funded projects and simplifies foreign-invested management procedures.
(ii) Provincial Government’s Opinions on Policies of Expanding Opening-up and Positively Utilizing Foreign Funds (No.33 [2017] of the Jiangsu Provincial Government). The document was issued by the People’s Government of Jiangsu Province in March this year. It combines the requirements of the Central Government with Jiangsu’s reality, through strengthening policy guidance and work efforts, to further deepen the reform and optimize the situation, consolidate and enhance our province’s advantages in utilizing foreign investment, in the hope of creating a “strong magnetic field” to attract foreign investment and drive the province’s open economy to a new level.
This document is divided into three parts with 23 measures. In the first part, “further develop the new dynamic of foreign investment”, we stress the strategy of inviting foreign investment driven by the “two wheels” of operating cutting-edge manufacturing industries and contemporary services. Meanwhile, we also clarify the supportive policy for main industries and encourage foreign-invested corporations to participate in the technological innovation. In the second part, “further form a fair competitive market”, we present some certain measures to accelerate the establishment of an unbiased and impartial environment for both foreign and domestic companies. In the third part, “expand the scale of investment invitation”, we propose to advance and accelerate the assurance of policies’ guiding role and arouse overall enthusiasm for expanding the scale of investment invitation in the aspects,of the leading role of government, the construction of mechanisms and platform of exchanges, the preferences of policy, etc.
*The English version is only for reference. To learn more, please read the authoritative Chinese version.
