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State Council proposal to ease FDI in Shanghai

BritCham / CBBC
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The State Council is to submit plans to the National People's Congress to facilitate foreign direct investment in Shanghai's free trade zone (FTZ), according to China Daily. It is hoped that the proposed laws will make investment in the area more efficient, although reforms are currently being held up by wrangling between different government departments.

Tax incentives for individuals have been proposed to bring Shanghai FTZ into line with other, currently more attractive regions for FDI such as Hong Kong. The abolition of VAT has also been mooted. The newspaper points out that foreign joint ventures still take longer to establish on the mainland than in Hong Kong (two to four weeks versus one) and that foreign-exchange transactions are less flexible.

FDI in China increased 4.9pc in the first half of 2013. Experts cited in the article suggest that China must make it easier for foreign investors to access the market and manage their investments if the country is to continue to open up effectively.

Source: China Daily, 20 August 2013

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