China vows to open manufacturing to foreign investors

China pledged on Tuesday to strengthen key industries such as artificial intelligence (AI) and space, while also offering increased access to manufacturing and some service sectors for foreign investors, Reuters reported.

This move is aimed to counteract a decline in foreign investor sentiment and promote self-sufficiency. However, the effectiveness of these reforms will depend on their full and timely implementation.

Despite previous commitments to open up the manufacturing sector, foreign investment has not significantly increased. The National Development and Reform Commission also plans to relax restrictions on market access in service industries.

While some foreign companies have been allowed to establish wholly-owned entities or take majority control of joint ventures, shifting economic conditions have led to a decrease in foreign direct investment in China’s manufacturing sector.

This has resulted in some foreign companies selling their stakes in joint ventures to Chinese counterparts. Ultimately, foreign investors will base their decisions on returns and global strategy rather than government announcements.