China, with one of the world's largest populations, boasts a vast and diverse consumer market. Specially with the growing middle class, there is an increasing demand for high-quality products and services, which brings unlimited market potential and numerous investment opportunities.
The Organization for Economic Cooperation and Development (“OECD”) released its economic outlook report on December 4, 2024. This report points out: the global economy is beginning to recover and is expected to grow at a rate of 3.3% in 2025, it further states that in the next two years, China will still be one of the biggest growth engines of world economy.
In addition, opening-up is China’s fundamental national policy, over the past decades, China has never stopped its efforts on optimizing the foreign investment environment and strengthening the foreign investment attraction, to continuously creating a market-oriented, rule-based, and international business environment for global investors, thus achieving mutual benefits and Win-Win.
According to the “World Openness Report 2024” , from 2008 to 2023, China’s openness index rose from 0.6789 to 0.7596, an increase of 11.89%, ranking among the highest in the world. Additionally, from the data announced by the Chinese Ministry of Commerce, in the first 10 months of 2024, there were 46,893 newly established foreign-invested enterprises in mainland China, a year-on-year increase of 11.8%, and the intended transaction volume of the 6th “China International Import Expo” held in November 2024 was 78.41 billion US dollars, a year-on-year increase of 6.7%, it fully indicates that foreign investors still have strong confidence in the Chinese market and are optimistic about the long-term development prospects of the Chinese economy.
In 2024, Chinese authorities have introduced a range of measures to further expand opening-up several sectors to attract foreign investment, mainly include the followings:
The “Special Management Measures for Foreign Investment Access (Negative List) (2024 Edition)” have been implemented since November 1, 2024. Compared to 2021 Edition, one of the most remarkable changes is: for foreign investment, the restrictions on access to the manufacturing sector have been completely lifted, which means foreign and domestic investors will enjoy full and equal treatment. This important initiative will provide more opportunities to overseas investors to invest in China, especially multinational companies, promoting international cooperation and mutual benefit.
As of September 2024, the number of foreign-invested enterprises approved to operate telecommunications services in China has increased to 2,220.
China’s Ministry of Industry and Information Technology (“MIIT”) launched a pilot program on October 23, 2024 to expand opening-up in value-added telecom services in four designated areas: Beijing, Shanghai, Hainan and Shenzhen.
The pilot program allows foreign investors to:
China’s Ministry of Commerce and other departments launched a pilot program in September 2024, to expand opening-up in medical sector.
From December 1, 2024, the Chinese government grants all Least Developed Countries (“LDCs”) that have diplomatic relations with China “Zero Tariff Treatment”. The total number of least developed countries which can enjoy this treatment is 43, including 33 countries in Africa, 8 countries in Asia and 2 countries in Oceania.
In addition to the above measures, China also decided to expand its Visa-Free Arrangement to further facilitate personnel exchanges between China and other countries. Starting from November 30, 2024, visa exemption will be applied to ordinary passport holders from 38 countries within its visa-free arrangement, can enter China without a need to apply for a visa for the purposes of business, tourism, family visits, exchanges and visits and transit, with stays of no more than 30 days.
On December 17, 2024, the National Migration Administration (“NIA”) announced that it will relax and optimize the visa free-transit policy. The stay duration for foreign nationals eligible for visa-free transit has been extended from the previous 72 hours and 144 hours to 240 hours (10 days), this policy currently applies to 54 countries.
The connection between China’s economy and the world economy is becoming increasingly close today. In the era of economic globalization, a more open China will inevitably provide more opportunities and long-term benefits to investors and partners from all over the world.
Accounting and Taxation
Announcement on Nationwide Implementation of Preferential Policies for Individual Income Tax on Private Pension
Pursuant to the Notice of the Ministry of Human Resources and Social Security, the Ministry of Finance, the State Taxation Administration, the National Financial Regulatory Administration and the China Securities Regulatory Commission on Full Implementation of the Private Pension Scheme (Ren She Bu Fa [2024] No. 87), the private pension scheme shall be fully implemented with effect from 15 December 2024. The preferential policies for individual income tax on private pension are hereby announced as follows:
Human Resources
China Integrates Foreigners' Work Permits with Social Security Cards for Streamlined Services
On October 27, 2024, the Ministry of Human Resources and Social Security issued a notice on the integration of foreigners' work permits and social security cards. Starting from December 1, 2024, China will integrate foreigners' work permits with social security cards, and provide convenience for foreigners to work and live in China by loading foreigners' work permit information into social security cards, relying on physical social security cards and electronic social security cards.
Starting from December 1, 2024, the talent bureaus and Exit and Entry Administration bureaus of several districts and counties in Shanghai organized business training for enterprise managers to carry out policy support and implementation interpretation. The application, extension, change and cancellation of the foreigner's work permit are handled online in the foreigner's work management service system, and there is no need to apply for a physical foreigner's work permit after entering China. The entity foreigner work permit has been obtained, in accordance with the principle of "unchanged", to apply for extension or change of the existing work permit in accordance with the new procedure of card integration.
Corporate Governance
China Announces Implementation of Administrative Measures for Beneficial Owner Information
In order to improve market transparency, maintain market and financial order, and prevent money laundering and terrorist financing activities, the People's Bank of China and the State Administration for Market Regulation had jointly issued Administrative Measures on Beneficial Owner Information which came into effect on November 1, 2024.
The Measures clarified the scope of market entities that need to file beneficial owners' information, as well as the conditions for waiver of the requirement, specifying that the following entities shall file beneficial owner information through the relevant registration system: (I) companies; (II) partnerships; (III) branches of foreign companies; and (IV) any other entities stipulated by the People's Bank of China and the State Administration for Market Regulation, while a market entity that are formed by natural-person shareholders or partners and with a registered capital of less than 10 million yuan (or equivalent amount in foreign currency) may be waived from the filing requirement after it has made a commitment on its eligibility. The existing entities which have already registered prior to effectiveness of these Measures shall file their beneficial owner information pursuant to the provisions of these Measures before 1 November 2025.