From 2008 to 2018, China's business environment index for foreign investment was in the top 10 among a sample of 30 countries and regions. [Photo/VCG]

Concrete steps necessary to deal with fallout from rising global uncertainties

Concrete efforts are needed to further optimize the foreign investment environment in China amid rising global uncertainties, a new report said on Tuesday.

From 2008 to 2018, China's business environment index for foreign investment was in the top 10 among a sample of 30 countries and regions, said the Report on Foreign Investment Development in China 2019 released by the Institute of International Economy at the University of International Business and Economics in Beijing.

"The business environment for foreign investment has continued to improve, but uncertainties have increased," said the ninth edition of the annual academic research.

Li Yumei, a professor at the institute and a major participant of the report, said: "Overall, China's business environment is expected to ensure relatively stable foreign direct investment in the future."

The Sino-US trade friction is hampering the flow of foreign capital into China's high-tech industries. But such an impact is still relatively small, she said.

China needs to carry out more effective policies and measures to cushion the potential impact in the future, she said.

The report comes amid profound changes in both China's domestic and international economic environment. At the international level, there has been a growing anti-globalization sentiment, a clamor in the developed countries for the return of their manufacturing industries, the study said.

To effectively respond to such changes, the report said China needs to actively deepen reforms and opening-up, constantly enhance the business environment for foreign investors, and utilize more foreign investment.

China has been ramping up efforts to improve business environment for foreign investors, such as renewing negative lists, promoting the Foreign Investment Law and setting up more pilot free trade zones.

Data from the Ministry of Commerce showed that FDI into the Chinese mainland reached 752.41 billion yuan ($107.28 billion) in the first 10 months of 2019, up 6.6 percent year-on-year. Foreign investment flowing into China's high-tech industries surged 39.5 percent year-on-year to 222.4 billion yuan in the period, accounting for nearly 30 percent of the total FDI.

Sang Baichuan, director of the institute and leader of the academic research, said the country needs to ensure that the market plays a decisive role in the allocation of resources, which is a "vital foundation" for improving the foreign business environment.

Sang said he hopes clear and effective supportive guidelines for the Foreign Investment Law will be ready in the near term.

Zhang Xiaotao, dean of the School of International Economics and Trade at the Central University of Finance and Economics, said in the new era, there have been fresh challenges for using foreign investment.

Zhang said one structural problem is the relatively great gap among different regions in optimizing the business environment, and called for targeted measures to address the issues.

In early November, the State Council issued a guideline on better using foreign investment, with a focus on safeguarding the national treatment of foreign-funded enterprises.