Xi Jinping Announces Economic Reform Measures

On 10 April 2018, President Xi Jinping announced a series of economic measures during his keynote speech at the annual conference of the Boao Forum for Asia (BFA).

The measures are designed to advance China's economic reforms by easing market access restrictions on foreign investment, improving China's ability to attract foreign capital, strengthening protections for intellectual property rights, and expanding imports.

Some of the steps had been announced previously, including for example:

  • Reducing market entry, business scope and ownership restrictions on foreign investment in the banking, securities and insurance industries (see Legal updates, China to further open financial markets and CBRC revises administrative licensing rules on foreign-invested banks).
  • Restructuring the State Intellectual Property Office (see Legal update, NPC approves State Council institutional reform plan).

President Xi called for revising the negative list for foreign investment by June, increasing imports by lowering import tariffs on motor vehicles and some other products this year, and lifting foreign equity caps in the automobile, ship and aircraft manufacturing sectors as soon as possible.

President Xi also expressed support for accelerating China's accession to the WTO Agreement on Government Procurement and hosting the new China International Import Expo in Shanghai.

The BFA is a non-profit organisation established in 2001 to promote economic exchange and development among business, government and academic leaders in Asia and beyond.

Market Reaction

Philip Cheng, Partner, Hogan Lovells, Shanghai: “The reform measures are part of a concerted effort by the Xi administration to attract foreign investment both to support China's drive to develop the next generation of advanced technologies and to promote competition for China's state-owned enterprises. Xi also appears to be offering an olive branch to the Trump administration and other who criticise China's protectionist trade and investment policies. As with all policy statements of reform, the extent of the liberalisation will be determined by their implementation in practice rather than the letter itself."

Action Items

Counsel for clients in an industry directly addressed in the speech may wish to work with government relations colleagues to identify any pending policy changes. Counsel for foreign exporters to China will want to pay close attention to any changes in import tariffs. Counsel for clients with foreign-invested entities in China will want to watch for issuance of the new negative list for foreign investment.

Jurisdictions

Senior Consultant and Accredited Mediator, RPC

A commercial disputes lawyer with over 35 years' experience, David has extensive experience in handling the defence of professional indemnity, financial lines and other special risks claims as well as advising insurers in relation to such claims.

David has worked on the defence of claims in various jurisdictions including England, Hong Kong, Singapore, Malaysia, the PRC, Taiwan, Bermuda and the BVI.  He also has significant experience in handling regulatory and disciplinary matters.

He has considerable experience providing general risk management advice to professionals such as accountants, solicitors, insurance brokers, surveyors and stock-brokers. 

Most recently, he has been developing a practice as a commercial mediator. David is accredited as a mediator by both the Centre for Effective Dispute Resolution (CEDR) and the Hong Kong Mediation Accreditation Association Limited (HKMAAL).