Updated 11:29 AM EDT, Tue, Jun 16, 2020

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China Opens Market to Lure More Foreign Investors Amid Challenges

China Opens Market to More Foreign Investment Amid Challenges

(Photo : Getty Images) China has relaxed rules and regulations on foreign investment to lure businessmen to invest in the country.

Despite China's efforts in opening up its market to entice more foreign investors, economic analysts said on Monday that the step may be a little too late given the impending assumption into office of US president-elect Donald Trump who has been throwing his trade tirades against China.

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China's economic planners have been taking market-opening steps to lure foreign investors into the country, but analysts said Beijing would be having a difficult time with a hostile administration ready to assume office in Washington.

Beijing's economic agencies have announced this month that they have opened new industries to foreign investment and have relaxed regulations restricting foreign investment in certain sectors.

Top Destination

After it lost its position as the world's top destination for foreign investment to India last year, Beijing said it will have to work double time to regain the status despite the challenges it is currently facing in its economy.

China's National Development and Reform Commission (NDRC) said that among the various sectors it has opened to foreign investors for the first time were lithium mining, electric vehicle batteries, railway, and transportation.

Many analysts said Beijing's relaxation of the foreign investment rules and regulations failed to tackle the business needs of foreign investors and would not result in the economic boost that China so badly wants.

Trade War

"China has only superficially opened up more sectors to foreign investment. The broader environment is still highly restrictive, with wide swaths of the economy either off limits to foreign investors or with ownership caps that require foreign investors to engage in joint ventures with Chinese partners," Scott Kennedy, an economic expert at a Washington think tank, said.

Another challenge that Beijing is facing in its foreign investment opening measures is the current China-US trade dispute, analysts pointed out.

This month, President Barack Obama blocked the sale of a German chip manufacturer to a Chinese company citing national security. In another incident, a US trade agency blacklisted Taobao, the online retail site of Alibaba's group of companies, for selling fake goods.

Analysts said China would be facing tougher trade action once Trump assumes office as obviously seen in his choice of head of the National Trade Council, a known anti-China critic, Peter Navarro.

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