China reopens its economy by approaching Trump tariffs

The new measures are a long-standing promise of the Chinese government and include the flexibilization of foreign investment in sectors ranging from banking to agriculture.

China is gradually implementing its promises to open to foreigners while an impending trade war with the United States focuses on Beijing's stance on business in the second largest economy in the world. 19659006] The government formalized on Thursday easing restrictions on foreign investment in a range of sectors, from the bank to agriculture, updating its list of so-called negative sectors where the economy is not. foreign investment is restricted or prohibited.

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It's an opportunity for companies like Goldman Sachs Group and BP to grow into an economy which has 1.4 billion consumers. Among the changes, many of which have already been announced, the maximum foreign ownership limits of brokerage companies and insurance companies will be eliminated in 2021 and in 2022, the same will be done in the car manufacturing sector special. The US government and the European Union have often criticized the lack of openness of the Chinese economy, which included barriers to entry in certain sectors as well as requirements for businesses. who invest, such as valuable technology transfer. China's relations with the United States are deteriorating and both countries are threatening to raise tariffs from early July and impose other restrictions.

The publication of the list comes at a "critical moment in an impending trade war," said Gai Xinzhe, an badyst at the Institute of International Finance at the Bank of China in Beijing. "Reducing the list means that there will be more opportunities for foreign companies and reiterates China's antiprotectionist stance."

China is seeking to increase foreign access to its market, both with these changes in terms of investment and lower tariffs for different products. Thursday's statement from the National Commission for Development and Reform said that as of July 28, the number of sectors reserved for foreign investors will be reduced to 48, while it was 63 in 2017

Raw Materials

The country's huge raw materials sector weighs heavily among those removed from the list.

In what is an advantage for companies such as Bayer AG and KWS Saat Se, China will end the limitation of foreign ownership of companies that develop and produce seeds with the exception of wheat and maize . Previously, foreigners were not allowed to participate in joint ventures. Restrictions on local purchases and wholesale sales of rice, wheat and maize will also be eliminated. The ban on foreigners developing and producing fish, livestock and transgenic crops will be maintained.

The ERRC will also remove the rule that Chinese partners should be in the majority in the construction and operation of power grids, in accordance with a reform "The inflection of revenues from all forms of capital to the sector is a natural step for the reform of electricity in China, "Tian said by phone. Miao, badyst at Everbright Sun Hung Kai Co. in Beijing. "The electricity reforms in China in recent years have fostered greater transparency in the cost structure of network operators and the role of the market in the distribution of electricity."