China's comprehensive opening up of manufacturing industry releases major signal of economic transformation

On October 18, at the opening ceremony of the third “Belt and Road” International Cooperation Summit Forum, China announced the complete lifting of restrictions on foreign investment access in the manufacturing sector. This is another step forward on the basis that the national manufacturing industry has been basically opened up and the negative list manufacturing industry in the free trade pilot zone has been cleared. It also releases an important signal of China's economic transformation.

At present, China's general manufacturing sector has achieved full opening-up. The manufacturing items on the negative list of the Pilot Free Trade Zone have been completely cleared, and all restrictions on foreign investment access will be lifted in the automobile industry starting from 2022. In the "Special Management Measures for Foreign Investment Access" (Negative List), there are only two negative lists involving the manufacturing industry, namely "the printing of publications must be controlled by the Chinese party" and "investment in steaming, frying, broiling and roasting of traditional Chinese medicine pieces is prohibited" The application of forging processing technology and the production of confidential prescription products of proprietary Chinese medicines." The comprehensive lifting of restrictions on foreign investment access in the manufacturing sector means that the above two special management measures will also be cancelled. The last two types of investment restrictions in the manufacturing industry have been lifted, which is conducive to industry development and global competition, and is also conducive to the diversification of industry investment. It also shows that China is promoting all-round opening up to the outside world in depth.

Comprehensively opening up the manufacturing industry will help accelerate the transformation of China's manufacturing industry. China is the world's largest industrial producer, and manufacturing is the foundation of China's industrial economic development. Although China has the most complete production chain in the world, it needs international capital and technology to complete the transformation of smart industry. The complete lifting of restrictions on foreign investment in the manufacturing industry means that China's manufacturing industry will be more open, and foreign-funded enterprises can enter the Chinese market more freely and share the development opportunities of China's manufacturing industry. In addition, it will also help improve the internationalization level of China's manufacturing industry, promote cooperation between Chinese and foreign enterprises, and promote the development of China's manufacturing industry in the direction of high-end, intelligent, and internationalization.

At the same time, the comprehensive opening up of the manufacturing industry to the outside world will increase the number of competitive entities in China's domestic manufacturing market, thereby promoting market competition. This will eliminate some backward production capacity and optimize the manufacturing industry chain. China's manufacturing industry is large and comprehensive, but its management model is backward. The entry of foreign-funded enterprises may bring more advanced technology and management experience, prompt domestic enterprises to improve their competitiveness, and promote the progress of the entire industry.

China's comprehensive opening up of manufacturing investment has also revealed an important message to the outside world. Unlike Western countries that vigorously develop the financial services industry, China's economic development still centers on manufacturing. Of course, the complete lifting of foreign investment access restrictions in the manufacturing industry will bring more development opportunities, but it may also have a certain impact on domestic companies, and even domestic brands may be controlled by foreign capital.

In response to this situation, China will further strengthen market supervision and improve relevant laws and regulations, which can not only protect the legitimate rights and interests of domestic enterprises and brands, but also regulate market order and ensure fair competition. The complete lifting of restrictions on foreign investment in the manufacturing sector reflects China's determination and confidence in opening up. China must not only introduce advanced technology, but also attract international capital and build an international Chinese manufacturing industry.