China will boost global free trade through new policies, observers say
China may remove more items from its recently announced negative list amid efforts to further open up its market to foreign investors, a stance that will help consolidate the global multilateral governance system, senior experts and officials said.
"China has a firm stance to promote globalization amid protectionism threats," said Yuan Feng, head of the foreign investment department of the National Development and Reform Commission. "Recent efforts to ease or cancel existing restrictions on foreign investment in many fields demonstrate our determined willingness to continue promotion of opening-up."
Last month, the central government announced a shortened negative list for foreign investment at the national level and free-trade zones. At the national level, the number of restrictive measures in the negative list was reduced from 63 in the previous version to 48, while restrictive measures in free-trade zones was reduced from 95 to 45.
A negative list bars foreign investors from some sectors of economy.
Cui Fan, a professor at the University of International Business and Economics in Beijing, said he expected sectors with a specific timetable to phase out shareholder limits for foreign investors, and those with restrictions removed only in free-trade zones, might become the next batch of fields to be taken off the national negative list as part of the country's sustained efforts to promote opening-up.
"Removing investment barriers for foreign investors comes at the right moment — more foreign investment would improve the playing field and hasten China's efforts to promote reforms at home," said Yu Yongding, a senior researcher at the Chinese Academy of Social Sciences.
Yu, a former member of the central bank's monetary policy committee, said that the country's recent moves to further open up its economy are part of its preset agenda instead of any expedited, pressure-alleviating measures. "We have already fixed the agenda before."
"In terms of our own interest in continued promotion of reforms, our opening-up efforts have little to do with things like, say, response to the U.S.' (recent trade) pressure (on China)," he said.
He said more opening-up efforts would promote China's improvement of regulatory procedures to create a market that is more fair and to have a positive effect on the broader economy, as it will attract foreign investment into high-skilled industries.
But he warned that China must improve its foreign exchange management to avoid massive capital outflow and control financial risks.
Zhu Guangyao, former vice-minister of finance, said that such opening-up will help consolidate the multilateral global economic and trade governance system, especially under the framework of the Group of 20, to promote inclusive growth, innovation and cross-border infrastructure investment.
"China's opening-up makes it an important participator in G20," Zhu said at a seminar hosted on Saturday by the National Association of American Studies.
Zhu Min, head of the National Institute of Financial Research at Tsinghua University, warned at the same seminar that uncertainties could arise when the U.S. Federal Reserve accelerates interest rate increases and monetary policy normalization in the coming quarters, because the higher tariffs resulting from the U.S.-initiated trade friction with China and other countries could boost product prices and fuel inflation expectations in the U.S.