Wider, deeper opening pledged

Here comes the point again that we keep harping on about: While the U.S. is stuck on insisting that its economic reform demands be met before it will consider lifting its tariffs on Chinese goods, China is busy getting on with the business of Reform and Opening, Act II.

The National Development and Reform Commission announced today in Beijing that the country will remove all access restrictions on foreign investment in areas outside the “negative list” by the end of this year. The reason they are doing this, according to China Daily, is because it is part of the country’s overall effort to further open up the economy and pursue high-quality development (emphasis added).

“China welcomes foreign businesses to invest and develop in China. And we will continue to unswervingly expand opening up, create a more open and business-friendly environment and protect the legitimate rights and interests of foreign investment,” Meng Wei, spokeswoman for the NDRC, said.

That is not all. “Our negative lists will only be shortened further,” she added. “By the end of this year, China will lift all barriers to foreign investment not included on the negative list. And China will encourage more foreign investment in more fields, especially for the central and western regions.”

A negative list indicates areas where investment is prohibited, while all other areas are presumed to be open. The reality, however, is that many other areas have had a slew of other restrictions in place that effectively shut out foreign competition, and it is these areas where the barriers are coming down.

What does this mean for investors in the GBA? Perhaps rhetorical questions work best. Where do you suppose high-quality development is going to be pursued most vigorously? In the western and central regions, far from an integrated supply chain and the world’s busiest financial markets and ports? Or right here?

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