Trade and Commodities
Q1: What are the Chinese government main topics in the fourth meeting of the annual Sino-US Strategic and Economic Dialogue (S&ED) concluded on Friday, 4 May 2012?
A1: the Chinese government made a number of statements of intent to promote foreign investment in China, and in particular about future development and liberalization of the PRC financial markets, to continue to simplify and enhance transparency in its foreign investment approval system, and to expand the areas open to foreign investment. China also reaffirmed its commitment to exchange rate flexibility in order to make imported goods and services cheaper for Chinese consumers and increase China’s attractiveness as an export market.
Q2: Does China have national security review regime?
A1: Yes. With the deepening of economic globalization and further expansion of China’s opening-up, the investment in the form of merger and acquisition by foreign investors has gradually increased, which has promoted the diversification of China’s utilization of foreign funds, and played an active role in optimizing resources allocation, advancing technical progress, and improving business management level, etc. In order to guide orderly development of merger and acquisition of domestic enterprises by foreign investors, and to safeguard national security, and after obtaining the consent from the State Council, the General Office of the State Council notified a circular related to the establishment of security review system regarding merger and acquisition of domestic enterprises by foreign investors. It contains the scope, content, mechanism, procedures and other regulations of the security review.
Q3: How many can the foreign financial institutions invest in China’s RMB denominated stock and bond market?
A3: As per the commitments made by China in this meeting, the amount of the investment has been enhanced from US$30 billion to US$80 billion.
Q4: Does the auto financing insurance sector have been improved according to the S&ED meeting?
A4: Yes. China and the US jointly released a fact sheet on strengthening US-China economic relations, according to which China is set to open up its large compulsory transport accident insurance (“CTAI”) market to foreign insurers.
Q5: What are the most significant commitments that China has made for improving the general investment and trade environment between China and the USA?
A5: As a conclusion, China has committed a lot of sectors pertaining to improve foreign investments, including:
1. Providing non-discriminatory treatment to all enterprises, regardless of ownership, in terms of credit, taxation, and regulatory policies;
2. Agreed to increase the number of state-owned enterprises that pay dividends, as well as increase the level of dividends paid;
3. Agreed to participate in negotiations for new rules on official export financing, with the first meeting to take place this summer in Washington, in an attempt to redress the balance of competitiveness between China’s subsidized exporters and other major exporting nations;
4. Committed to submit a revised comprehensive offer to join the World Trade Organization Agreement on Government Procurement by the end of 2012;
5. Committed to increase protection of intellectual property rights;
6. Agreed to intensify negotiations for a Sino-US bilateral investment treaty.