In November 2023, the State Council of China approved a comprehensive plan to expand and advance Beijing's service sector. This strategic initiative, known as the Working Plan for Supporting Beijing in Deepening the Construction of a Comprehensive Demonstration Zone for the Expansion and Opening Up of the National Service Industry, delineates 23 specific tasks to propel the city's service industry. Notably, a significant portion of these tasks are dedicated to fostering increased involvement of international enterprises.
Since its designation as China's inaugural Integrated National Demonstration Zone for Opening Up the Services Sector in 2020, Beijing has assumed a pioneering role in unlocking the potential of the services sector. During a press conference on 24 November, Deputy Mayor of Beijing Sima Hong highlighted the city's efforts to open the services sector, facilitate services-related trade, and enhance the business environment conducive to an open economy.
While the primary objective is not exclusively centred on attracting foreign investment, the Working Plan incorporates various measures to augment the business environment for overseas companies. These measures include removing foreign ownership restrictions in selected sectors, refining visa processes, enhancing cross-border data transfer and funding procedures, and streamlining government services and administrative protocols.
According to the vice-minister of commerce and China's deputy international trade representative, around 40 per cent of the measures align with the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) rules and the Digital Economy Partnership Agreement (DEPA).
The following spotlights key commitments outlined in the Working Plan that are geared towards elevating Beijing's business milieu and enriching the landscape for foreign investment.
Facilitating foreign investment in key sectors
Telecommunication service sector
The Work Programme cancelled the restrictions on the ratio of foreign shares in value-added telecommunication businesses, such as information service businesses other than network publishing services and Internet access services for users.
According to the Negative List for Foreign Investment Access (2022 Version), investment in value-added telecommunication services (except for e-commerce, etc.) must not exceed a foreign share ratio of 50%. This measure will maximise liberalisation within the red line restrictions, intensifying competition in end-user access services and content services.
Health medical service sector
The Work Programme issued several beneficial measures to expand access for foreign companies in medical services, including:
- Facilitate the establishment of clinics in Beijing for eligible foreign, Hong Kong, Macao, and Taiwan doctors.
- Explore ways to provide equity incentives to foreign, Hongkong, Macao, and Taiwan practitioners in pharmaceutical R&D enterprises in the stem cell and gene fields.
- Promote the facilitation of human genetic resources management services for enterprises in Beijing, Hong Kong, and Macao.
- Innovative medicines and devices (except large-scale medical equipment) for which Beijing-registered enterprises have obtained marketing approval in China will be imported at designated medical institutions according to clinical needs.
- Support establishing green channels in Beijing to approve imported medicines and devices in urgent clinical need.
- Promote the application of authentic data in medical technology research.
- Strengthen the standardisation of clinical medical data and inter-institutional openness and interoperability.
- Deepen the national comprehensive innovation pilot of the rehabilitation assistive device industry, promoting the results of the pilot community leasing of rehabilitation assistive devices, supporting foreign cooperation in the research and development and application of rehabilitation assistive devices, and promoting the development of the rehabilitation assistive device industry.
- To set up an international comprehensive service platform for Chinese medicine, build an online trading platform, and support enterprises exploring the global market.
- Take China's accession to the Pharmaceutical Inspection Cooperation Scheme (PIC/S) as an opportunity to promote the high-quality participation of qualified enterprises in the construction of the One Belt, One Road and other international cooperation and help innovative medicines to go out.
These measures improve the policy conditions for international cooperation in digital medicine, illuminating the grey areas in cellular medicine, expanding the international cooperation channels of modern medicine and pharmaceuticals, and providing great space for project investment and innovative development, but requiring policy adjustments by related departments. There will be an influx of international projects in extensive health services.
Financial service sector
In the financial sector, the plan pledged to level the playing field for foreign investors looking to provide financial services and explore steps to support insurance asset management companies in their efforts to issue RMB-denominated asset management products overseas.
This policy has little room for flexibility at the current international and domestic financial environment stage. However, foreign companies can still look forward to medium- and long-term opportunities. There is still resilience for the innovation and optimisation of digital financing platforms, but supporting policies and regulations are still needed.
Cultural and educational service sector
The plan indicated the below beneficial measures:
- Optimise tax policies to support cultural enterprises.
- Support audiovisual programme service providers in introducing outstanding overseas film and television works.
- Optimise and regulate the management and services of critical online audiovisual platforms.
- Decentralise the approval authority for foreign investment in establishing performance venues, entertainment venues and Internet access service venues at the district level.
- Support establishing operating vocational skills training organisations by wholly owned foreign investors.
Investment opportunities and risks coexist in the cultural and educational sector, and the key to winning the market is having an attractive portfolio to drive the traffic to create a digital platform. This policy helps promote the transformation and upgrading of cultural enterprises.
Professional service sector
The plan promotes:
- Overseas qualified individuals to engage in securities investment and future trading consulting businesses.
- Dynamically improve the recognised overseas professional qualifications list and supporting policies.
- Explore and promote cooperation among professional service organisations in Beijing, Hong Kong, and Macao by laws and regulations.
- Introduce high-quality international conventions and exhibitions and actively bid for annual meetings of international organisations and convention and exhibition activities.
Ideally, joint forces between the government and the market should be formed to innovate the online and offline integration of the convention. Cooperation with famous international conventions and exhibition organisations and introducing themed conventions still have a large room for growth, but the core is to innovate self-owned brand-themed conventions.
Initiatives for cross-border financing and cash pooling
The Working Plan emphasises promoting cross-border financing facilitation pilot projects, signalling Beijing's commitment to advancing initiatives that streamline financial transactions across borders. It explicitly details plans to deepen the existing pilot program, integrating domestic and foreign currency bank settlement account systems, while expanding the participating banks.
Furthermore, the plan articulates the intention to broaden the scope of the pilot cash pooling program tailored for multinational companies. This expansion involves exploring and optimising quota management, aiming to enhance the efficiency of cash pools.
The plan also reiterated that legitimate funds linked to foreign investments can be seamlessly remitted into and out of China without delays. This restatement of principles aligns closely with the guidelines established in the September plan draft, which aimed to facilitate controlled fund transfers.
Measures to attract foreign talent
The plan calls for innovating the whole-process service management model for talents, which includes:
- Facilitating the processing of visas for imported talents and providing visa facilities for short-term scientific research in China.
- Providing customs clearance facilities for foreign experts holding residence permits to enter and exit the country.
- Allow the accompanying family members of experts transferred within foreign-invested enterprises in Beijing to enjoy the same period of stay as the experts.
- Issuing visas or residence permits valid for up to two years to senior executives of foreign enterprises planning to set up branches or subsidiaries in Beijing and allowing accompanying family members to enjoy the same stay.
- The citywide promotion of a one-stop acceptance and parallel approval system for foreigners' work permits and work-type residence permits.
China's visa policies have improved several times this year to facilitate international communications and exchanges. In August 2023, China's Ministry of Public Security (MPS) released a set of measures that will enable people travelling to China for business or trade activities to apply for a business visa on arrival. On November 7, 2023, China became a member of the Hague Convention, commonly referred to as the Apostille Convention. As a result of this development, foreign nationals applying for visas and other international documentation in China will no longer need to navigate the arduous process of document legalisation. Instead, they will only need to obtain Hague Apostille certification. This significant change will result in time, energy, and resource savings, enhancing the overall efficiency of the process.
Starting from December 1, 2023, until November 30, 2024, individuals holding ordinary passports from six countries, namely France, Germany, Italy, the Netherlands, Spain and Malaysia, will be able to enter China without a visa for purposes such as business, tourism, visiting relatives, and transit, for a duration not exceeding 15 days. During the Joint Council for Bilateral Cooperation (JCBC) on December 7, Singapore and China will implement a 30-day mutual visa exemption agreement early next year, according to Singapore's Ministry of Foreign Affairs, as the two countries agreed to upgrade a trade pact further.
