Beijing to ease investment curbs amid trade war

It outlines reforms in financial sector, drops curbs in aircraft, auto and shipbuilding industries

BEIJING • China has announced sectors of the economy where it will ease foreign investment rules, with leaders stepping up efforts to portray the country as opening up as they prepare for a possible trade war with the United States.

The new "negative list" outlines key reforms in the financial sector while dropping curbs in areas including the car industry, agriculture, infrastructure and mining.

The list released on Thursday by the National Development and Reform Commission, which takes effect on July 28, will reduce the number of fields with limits to 48, from 63 last year.

But some sensitive areas such as culture and national security will continue to be protected.

The announcement comes after the government unveiled changes earlier this year, which were seen as a nod to the US and other Western nations that have long complained about lack of access to the world's No. 2 economy.

Among them were the cancellation of foreign shareholding caps for banks and allowing 51 per cent control in some other financial fields for three years, after which restrictions will be scrapped.

But critics say the policy comes with other limits that make only the largest foreign banks eligible for entry.

The list also removes curbs on petrol station ownership, cereal trading and electricity infrastructure, while also easing restrictions in the auto, aircraft and ship-building industries.

The announcement comes as the world's two largest economies prepare next week to slap the first batch of new border taxes on tens of billions of dollars in goods from both countries, fanning fears of a potentially damaging trade war.

Facing outside protectionism, China must "make greater efforts to promote openness, promote reform, promote development, promote innovation through openness, and promote the further development of economic globalisation", the commission said.

"Investment cooperation between China and other countries and regions will be deepened further, with more extensive exchanges of capital, technology, management and talents."

Beijing's rhetoric is in sharp contrast to Washington, where officials have been considering ways to limit Chinese investment and even the flow of some Chinese nationals to US universities.

China has been keen to portray itself as the wronged party, repeatedly saying it does not want a trade war but will hit back with equal strength if forced into a corner.

Officials also released a white paper on Thursday mounting a full-throated defence of its pledged reforms and promises since joining the World Trade Organisation in 2001. "China has steadfastly carried out every promise made upon entering the World Trade Organisation," Vice-Commerce Minister Wang Shouwen said when introducing the report, and challenged countries that don't agree to "sue us at the WTO".

While the State Council makes no mention of US President Donald Trump in the white paper, its main statements read like a defence against many of his complaints about China, reported the South China Morning Post.

Mr Trump had tweeted in April that China, despite being a "great economic power", was still considered a developing nation within the WTO. "They therefore get tremendous perks and advantages, especially over the US. Does anybody think this is fair. We were badly represented. The WTO is unfair to US."

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on June 30, 2018, with the headline 'Beijing to ease investment curbs amid trade war'. Print Edition | Subscribe