Beijing plans to introduce new rules for access to the Chinese market

During the international forum 'China's Development' at the Diaoyutai State Residence from March 25 to 27, Prime Minister of the People's Republic of China, Li Qiang, discussed the forthcoming changes to the rules governing access to the Chinese market and cross-border data flows.
The head of the PRC government invited companies from all countries to invest in China and expand their positions, including more than a hundred foreigners: heads of leading transnational corporations, scientists and representatives of international organizations.

Li Qiang stated that China aims to accelerate the development of new industries such as biological manufacturing, the data economy and artificial intelligence.

Last week, Beijing relaxed some rules on foreign investment ahead of the China Development Forum. The interest in investment from abroad is particularly high due to a nearly 20% decrease in foreign investment in January and February of this year. On March 22, China's cyberspace regulator relaxed several security requirements for data exports that have been a concern for foreign companies operating in China.

Reuters emphasizes that inflation and the debt burden of the central government in China are relatively low. Lee optimistically stated at the Forum that this leaves room for macro changes. He listed measures that Beijing took last year to mitigate risks in the real estate and debt markets and emphasized their effectiveness.
During his speech, the Prime Minister presented several figures, including the issuance of 1 trillion yuan ($140 billion) in special ultra-long-term government bonds.

This measure is expected to attract investment and stabilize economic growth. China's economy, the second largest in the world at 18 trillion, has recently faced several serious issues, including a real estate market crisis, provincial authorities' debt burden, industrial overproduction, deflation threats, and a decline in foreign investment.

The China Development Forum has been an annual event since 2000. This is a high-level international conference where renowned figures from the business and finance world, such as Tim Cook from Apple and Ray Dalio, founder of Bridgewater Associates, regularly gather to discuss investments in the Chinese economy. Unlike the Premier of the State Council, this year the President of the People's Republic of China, Xi Jinping, will meet with guests from the United States. This meeting demonstrates Beijing's need for foreign investment and its efforts to attract foreign companies to China.

However, according to Reuters, foreign businesses have become less interested in China and its economy during the period of coronavirus restrictions, which were lifted at the end of 2022. Experts attribute this change in attitude towards China to concerns about working conditions in the country and the prospects for its economic recovery.

Li Qiang's announced changes aim to combat the decline in foreign investment. Although the Chinese economy has started 2024 confidently, experts abroad point to difficulties in achieving the target of around 5% annual economic growth, announced by the Prime Minister at the NPC session in early March. The ongoing crisis in the construction industry and the low level of Chinese household consumption are among the main obstacles to achieving 5% growth. Chinese income concerns and an uncertain labor market are holding back spending.