What China’s next 5-year plan means for foreign investors: ‘quantity to quality’
Beijing has pledged to open up even more to foreign investment. But some officials are becoming more selective about the projects they want
As China drafts its 15th five-year plan – the next entry in a line of expansive blueprints that have set the tone for the country’s development over more than seven decades – we examine how these documents inform and reflect high-level policy priorities, what to expect in the coming iteration and how foreign investors are likely to be affected.
Sun Xueguang has been helping broker China investment deals for years, but a recent meeting with local officials still caught him by surprise.
As the president of a Franco-Chinese start-up incubator organisation, Sun was used to foreign investors being welcomed by local authorities with big smiles and promises of preferential tax policies. But this time, the atmosphere felt different.
Sun was startled by the local cadres’ stricter requirements: they explicitly said they wanted to attract projects in certain strategic sectors, such as pharmaceuticals, healthcare and artificial intelligence.
“The message was clear: they want high-quality foreign investment that can help complete and develop their local supply chain,” said Sun, as he recalled the talks with officials based in the Yangtze River Delta, a prosperous region in eastern China centred around Shanghai.
“The mentality is shifting from quantity to quality.”
While Beijing says it aims to attract more foreign investment and plans to open up more sectors to overseas capital, there is uncertainty in the foreign business community about where they fit into Beijing’s new economic vision.
With China striving to become a global technological leader amid a period of rising geopolitical tension, will foreign investors still be important to Beijing’s agenda? And where will they find opportunities to expand and prosper?