China Releases Circular on Further Stabilizing Foreign Trade and Foreign Investment

On 12 August 2020, the State Council of the People’s Republic of China (“State Council”) released the Circular on Further Stabilizing Foreign Trade and Foreign Investment (the “Circular”), in which the Chinese government announced 15 policies aiming to protect foreign trade entities and to keep supply chains stable against the economic fallout of the unabated COVID-19 pandemic. A few key points of the Circular include: - In order to facilitate foreign trade flows and business travel to China, China will continue to work with foreign countries to establish “fast pass” to facilitate the international travel of foreign businessmen, logistics personnel, production personnel and technicians to China. - The China Export & Credit Insurance Corporation will provide insurance coverage against the risks of canceled orders before shipments. - Support to eligible regions to copy and expand the financing model featuring “credit plus guarantee insurance” and step up credit support to foreign trade firms, especially micro, small and medium ones. - Extended financial support to major foreign-funded companies, which are now eligible for the People’s Bank of China’s 1.5 trillion-yuan low-cost re-lending loan program and rediscount quota. - Key foreign investment projects over 100 million U.S. dollars will be treated in the same way as a domestic investment project. Meanwhile, the Chinese government will also increase its support for foreign investment projects in terms of the sea use, land use, utility usage and environment protection issues. - Encouraging foreign investors to invest in high-tech industries as well as healthcare enterprises. Facilitate the application process for high-tech enterprise certification. Lower the threshold for foreign R&D centers to be eligible for preferential policies, such as preferential import tax treatment.

• Type:

  • Treatment and operation (Non-discrimination)
  • Promotion and facilitation (Investment facilitation , Investment incentives)

• Sources:

  • The State Council, Work urged to further stabilize foreign trade, investment, http://english.www.gov.cn/policies/latestreleases/202008/12/content_WS5f33e19bc6d029c1c2637a2d.html, 12 Aug 2020
  • Lexology, China Releases Circular on Further Stabilizing Foreign Trade and Foreign Investment, https://www.lexology.com/library/detail.aspx?g=285d74b1-56d8-4f6c-8e6f-126b63d16fe1#:~:text=On%20August%2012%2C%202020%2C%20the,to%20keep%20supply%20chains%20stable, 24 Aug 2020