Massive corporate harvest awaits reaping

Because the new measures simplify the review procedures and timelines as compared to the previous management methods, the increased efficiency and more predictable outcomes expected under the new mechanism are likely to have a positive impact on foreign investment in China, attracting greater foreign investor interest, he said.

Thanks to China's continuously improving business environment, an efficient supply chain, competitive talent pool and 5G infrastructure for innovation, as well as its massive market size, foreign direct investment in China increased by 4.1 percent year-on-year in dollar terms to $129.47 billion in the first 11 months of 2020, according to the Ministry of Commerce.

"As China has been underlining further opening-up, in particular after signing the Regional Comprehensive Economic Partnership agreement with 14 partners in November and completing in-principle talks on an advanced investment treaty with the European Union last month, it is well prepared in many industries, such as the opening up of the financial services sector," said Wei Jianguo, vice-chairman of the China Center for International Economic Exchanges.

While many global economies are still trying new measures to tackle the spread of the pandemic, create jobs and boost exports, China is one of the few places that have kept global companies afloat, he said.

Unlike many economies, China has faced manageable supply chain risks as it was increasingly less reliant on manufacturing FDI in 2020, he said.

Tan Lee Lee, head of China at SBA Stone Forest, a Singapore-headquartered corporate advisory and public accounting group, said with the continuous growth of the Chinese economy, the implementation of the new measures, among other foreign investment frameworks, is timely as it brings greater clarity to foreign investments expanding into China.

"With the goal of setting the policy foundation right, the measures will enhance the transparency, predictability, effectiveness and efficiency of foreign investment security review to create a healthier foreign investing environment, one of the fundamentals necessary for the overall healthy economic growth in China," she said.

In the face of the global economic downturn and a shrinking international market caused by factors such as the COVID-19 pandemic, China has continued to push domestic growth via the dual-circulation development pattern, in which the domestic market is the mainstay and the domestic and foreign markets complement each other.

Therefore, attracting more foreign investments to China is paramount to this growth strategy, in order to create more momentum of conducting cross-border business, employment and talent cultivation, she said.

Despite the broad challenges of COVID-19, about 82 percent of British companies have cited China's market potential as a reason to increase investment in the country this year, according to a survey released by the British Chamber of Commerce in China last month.

Matthew Margulies, vice-president of China operations for the US-China Business Council, said US companies are optimistic about their growth in China over the next several years.

Considering that China has successfully controlled the pandemic and many economies have reported slow growth, more global companies will look for growth opportunities across the country, he said.

As the World Bank updated its projection for China's 2021 economic growth in December, which is set to accelerate to 7.9 percent, up 1 percentage point from its forecast in June, foreign investors that had been in China will continue to enjoy the benefits of economic growth, Tan said.

Foreign companies entering China will draw encouragement from the diversity and large marketplace for business in the country.

Driven by urbanization and changes in lifestyle of a more affluent population, the domestic market will continue to progress with continued demand for foreign goods, she said.