BEIJING: China hopes to suspend its laws governing foreign investment in proposed free trade zones, the cabinet said, in a sign the world’s second-biggest economy could open further to foreign competition.
The State Council, China’s cabinet, will ask senior members of the National People’s Congress for the power to suspend laws and regulations governing both foreign-owned companies and joint ventures between Chinese and foreign companies in free trade zones, including Shanghai, the cabinet said on its website.
The move is aimed at “accelerating transformation of the government’s role ... and innovating ways of (further) opening up (to foreign investment),” according to the statement, seen yesterday. It set no timetable, and gave no further details.
Foreign direct investment in China slowed in 2012 but reversed its decline in the first quarter of this year as confidence improved.
China attracted $38.3bn in foreign direct investment in the first four months of 2013, up 1.2 percent from the same period in 2012.
China’s financial centre, Shanghai, will test yuan convertibility and cross-border capital flows in the free trade zone pilot programme.
The country’s new leaders have signalled they want to speed the process of making the yuan fully convertible over the next few years, as part of efforts to boost the currency’s use in trade and support wider financial reforms.
Shanghai officials are keen to experiment with freeing up the capital account and yuan convertibility.
Reuters
