On Wednesday, 12 July 2017, Premier Li Keqiang chaired a State Council executive meeting discussing means on how to develop innovation within the Chinese economy. The meeting released a draft of their proposals to elicit public suggestions. The blueprint outlined 5 key areas for the Chinese government to focus on:
First, innovative government management. This involves streamlining the business registration process by creating a single, digital, integrated national system for handling all paperwork. Introducing policies to support new industries, like digital banking, and easing access to certain resources, like the internet and educational materials. Much of this will be connected to helping Chinese SMEs, as opposed to larger, state-owned enterprises.
Second, to integrate a series of integrated proposals known as “double” policies. This involves developing strategies for emerging industries, as well as helping established industries to modernize. This will be done by promoting modern technology, simplifying and strengthening legal procedures for patents, intellectual property, and listed prices.
Third, expand financial channels. This involves support for local banks, micro banks, corporate banks and insurance companies. The national and local government will play key roles by providing risk mitigation services, creating venture capital funds and scientific incubators.
Fourth, promote industrial upgrading. This means expanding logistical channels, modernizing management techniques, creating innovation centers, modernizing and linking key industries. This is part of a larger plan to create a clear strategy for the creation of a digital economy.
Finally, to strengthen the support network for talented individuals, both foreign and domestic. For domestic workers, the meeting recommended modernizing China’s rigid employment policies to be more flexible and entrepreneur friendly. Also improving policies on social security, taxation, and expanding entrepreneurs’ autonomy in universities and research institutions.
To encourage foreign entrepreneurs, China plans on simplifying procedures for work permits and residence permits in China for “high-level” foreign talent. China will introduce a “one-card” pilot program, in which costs for housing, child enrollment, and medical care for foreign workers are all included on a single card. Foreign students can apply for residence permits with their diplomas, and it will be easier for entrepreneurs from Hong Kong, Macao, and overseas Chinese to start businesses in China. To develop rural areas, the meeting recommended encouraging migrant workers to return home and start businesses.
It is unclear how much of this will be implemented. Most of the policies, even if they are implemented, are targeted towards domestic industries.
Yet there are several proposals that foreign companies should pay close attention to. New policies to support foreign entrepreneurs, a pilot program for foreign workers and their families, and an expanding financial industry all show a lot of promise. As innovation continues to be a top priority for the Chinese government, foreign companies may face increased pressure from domestic industries, along with new business opportunities.
If you have further questions regarding Chinese economic reforms, please do not hesitate to contact us via firstname.lastname@example.org.
Richard Hoffmann is a partner at ECOVIS Beijing China. Richard obtained an honors degree in law and worked in Germany, the United States, and China for various prestigious law firms prior to joining ECOVIS. In addition to being a member of the board of ECOVIS International, he is Supervisor for the China business of a respected German company and shares his extensive knowledge to students by teaching commercial law in China at SRH Hochschule Heidelberg. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV stations. Contact: email@example.com
|Ecovis Beijing is the trusted tax and legal advisor to several embassies and official institutions in China. It specializes in mid-sized international companies and is focused on tax & legal advisory, accounting and auditing. If you’re interested in finding out more about tax and legal, don’t hesitate to sign up for our Newsletter, give us a call +86 (10) 6561 6609 or contact us directly via firstname.lastname@example.org|