MNI POLICY: China Should Give Equal Subsidies to Foreign Firms

     BEIJING (MNI) - The Chinese government should extend the same subsidies

enjoyed by domestic companies to foreign firms as well if it were to abide by

the soon-to-be-implemented new Foreign Investment Law, policy advisors said at

the 6th China Inbound-Outbound Forum held by the Center for China and

Globalization (CCG) on Saturday.

     The new regulation, effective 2020, stipulates the government's supporting

policies, including funding, land supply and tax reductions, shall be applied

regardless of nationalities. 

     Under the spirit of the new law, if the central or local authorities offer

subsidy for state-owned companies, foreign companies should also enjoy the same

support, said Cui Fan, an expert advisor for the Advisory Committee for Economic

and Trade Policy at the Ministry of Commerce.

     Despite China's promises, some foreign companies voiced concern about

practical matters like different interpretations of the law across different

departments and regions.

     "It should be the new law that force the government to reform its

management mechanism, not the other way around," said Chen Wenling, chief

economist at the China Center of International Economic Exchange, speaking at

the same forum. She noted that the government should coordinate the law with the

workflow of every department, calling for innovating the governance capacity.

     China should abandon old laws which are contradictory to the new law, Chen

said.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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