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May 15, 2018

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Home » Business » Finance

China sees wider opening as strategic for economy

Source: Xinhua | 00:01 UTC+8 May 15, 2018 | Print Edition

Wider opening-up is a strategic choice for China as the country shifts its growth model to pursue high-quality development, experts said.

China recently announced a series of opening-up measures including allowing foreign brokers to hold a majority stake in securities joint ventures.

Following the announcement of the measures, foreign investors are racing to expand their presence, with big names including JP Morgan and Nomura applying to set up holding firms in the country.

Attracting foreign investment is very much in line with China’s supply-side structural reform, which calls for higher-quality resources, said Yang Changyong, a senior researcher from the Chinese Academy of Macroeconomic Research.

Since China began reform and opening-up four decades ago, foreign investment has created an important boost for economic growth.

Foreign direct investment in the Chinese mainland rose 7.9 percent to 878 billion yuan (US$138.6 billion) in 2017, an all-time high, official data showed.

As China transitions from high-speed growth to high-quality development, the quality of foreign investment should also be improved, Yang said.

The service sector, which accounts for an increasing share of the economy, has much potential for further opening-up, as China could make good use of foreign expertise in areas including health care and education, according to Yang.

Easing foreign equity restrictions in manufacturing sectors such as automobiles and aircraft is also in accordance with the country’s goal to optimize resource allocation and increase the supply of high-quality goods, he said.

To attract more high-quality investment, China should create a more encouraging environment, with mechanisms such as the negative list approach to be pushed forward, he said.

China has also pledged to enhance the protection of intellectual property rights in accordance with its commitment to the World Trade Organization and aimed at improving the socialist market economy, Yang said.

Expanding imports, another key policy initiative in the opening-up pledge, is the right choice for China as it aligns with the trend of consumption upgrading, said Li Dawei, a researcher with the Chinese Academy of Macroeconomic Research.

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