Manufacturing 'Zero Restrictions', Foreign-Only Hospitals: Sign of Change?
In 2024, China's economy is breaking through bottlenecks and seeking development.
In September, in the field of foreign investment, several significant news items were announced again.
First, according to a message released by the National Development and Reform Commission (NDRC) on the 8th, with the approval of the Party Central Committee and the State Council, the NDRC and the Ministry of Commerce issued the full text of the "Special Administrative Measures for the Access of Foreign Investment (Negative List) (2024 Edition)" on September 8th, which will come into effect on November 1, 2024.
The 2024 edition of the national negative list for foreign investment access has reduced the number of restrictive measures from 31 to 29, and the restrictions on foreign investment access in the manufacturing sector have been "zeroed out."
The "Special Administrative Measures for the Access of Foreign Investment (Negative List) (2021 Edition)" was simultaneously abolished.
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On September 8th, the "Special Administrative Measures for the Access of Foreign Investment (Negative List) (2024 Edition)" was officially released, reducing the number of restrictive measures from 31 to 29, and removing the items "publication printing must be controlled by Chinese parties" and "prohibition of investment in the application of steaming, frying, roasting, and calcining techniques in the processing of traditional Chinese medicine slices, as well as the production of proprietary prescription products of traditional Chinese medicine."
This means that after the implementation of the new negative list on November 1st, the restrictions on foreign investment access in China's manufacturing industry will be "zeroed out."
Over the past few years, China has continuously relaxed restrictions on foreign investment access, and has revised the national and free trade pilot zone negative lists for foreign investment access for five consecutive years from 2017 to 2021.
Among them, the restrictions in the manufacturing sector of the free trade pilot zone's negative list were the first to achieve "zeroing out" in 2021.
This revision extends this to the entire country.
Another significant development: according to a message on the Ministry of Commerce website on September 8th, the notice jointly issued by the Ministry of Commerce, the National Health Commission, and the National Medical Products Administration on carrying out pilot work to expand openness in the medical field clearly states that it is planned to allow the establishment of wholly foreign-owned hospitals in Beijing, Tianjin, Shanghai, and other places.
These two latest policy trends related to foreign investment are both significant events, and the trend signals they reflect are very important and deserve attention.
This article will be based on a detailed analysis of China's latest policy trends in the manufacturing sector and foreign-funded hospitals, combined with the current domestic economic reality in China, starting from the perspective of respecting common sense and laws, to deeply explore the policy intentions and key essence behind these two latest trends, and to conduct a deep, attitude-laden, and well-grounded special discussion and analysis of the possible changes and directions in the domestic economy.
According to a report by the CCTV News App: with the approval of the Party Central Committee and the State Council, the NDRC and the Ministry of Commerce issued Order No.
23 on September 8, 2024, releasing the full text of the "Special Administrative Measures for the Access of Foreign Investment (Negative List) (2024 Edition)," which will come into effect on November 1, 2024.
The "Special Administrative Measures for the Access of Foreign Investment (Negative List) (2021 Edition)" was simultaneously abolished.
The 2024 edition of the national negative list for foreign investment access has reduced the number of restrictive measures from 31 to 29, removing the items "publication printing must be controlled by Chinese parties" and "prohibition of investment in the application of steaming, frying, roasting, and calcining techniques in the processing of traditional Chinese medicine slices, as well as the production of proprietary prescription products of traditional Chinese medicine," achieving "zeroing out" of restrictions on foreign investment access in the manufacturing sector.
The NDRC will work with the Ministry of Commerce and other departments and regions to deeply implement the pre-access national treatment plus negative list management system, ensure the implementation of the 2024 edition of the national negative list for foreign investment access, and ensure that new opening measures are implemented in a timely manner.
For areas outside the negative list, they will be managed according to the principle of treating domestic and foreign investment equally, granting national treatment to foreign-invested enterprises.
At the same time, it insists on coordinating openness and security, and doing a solid job in risk prevention and control.
The 2024 edition of the national negative list for foreign investment access has reduced the number of restrictive measures from 31 to 29, canceling the last two items in the manufacturing sector, namely "publication printing must be controlled by Chinese parties" and "prohibition of investment in the application of steaming, frying, roasting, and calcining techniques in the processing of traditional Chinese medicine slices, as well as the production of proprietary prescription products of traditional Chinese medicine."
This means that after the implementation of the new special administrative measures for foreign investment access on November 1st, in the manufacturing sector's access link, foreign capital and domestic capital will fully enjoy the same treatment.
The main changes in the 2024 edition of the negative list are sorted out as follows: 1.
The number of restrictive measures is further reduced.
The 2024 edition of the national negative list for foreign investment access has reduced the number of restrictive measures from 31 to 29.
This change reflects China's firm determination to continuously relax restrictions in the field of foreign investment access.
The continuous "slimming down" of the negative list provides a broader space for foreign capital to enter the Chinese market, which is conducive to attracting more foreign investors to participate in China's economic construction.
2.
Specific item adjustments: a.
Removal of the item "publication printing must be controlled by Chinese parties".
This adjustment means that China's openness to foreign capital in the field of publication printing has been further improved.
The opening of the publication printing industry will promote technical exchanges and cooperation between domestic and foreign printing enterprises, and drive the overall improvement of the industry's technical level and innovation development.
At the same time, the entry of foreign capital will also intensify market competition, prompting domestic enterprises to improve their competitiveness, and optimize the industrial structure.
b.
Removal of the item "prohibition of investment in the application of steaming, frying, roasting, and calcining techniques in the processing of traditional Chinese medicine slices, as well as the production of proprietary prescription products of traditional Chinese medicine."
This move is an important signal for China to expand its opening up to the outside world in the field of traditional Chinese medicine.
Traditional Chinese medicine, as a treasure of China's traditional medicine, has unique advantages and huge development potential.
Canceling the restrictions on foreign capital in the production of traditional Chinese medicine slices processing techniques and proprietary prescription products of traditional Chinese medicine is conducive to attracting foreign capital into the traditional Chinese medicine industry, introducing advanced production technology and management experience, and promoting the modernization and international development of the traditional Chinese medicine industry.
c. The restrictions on foreign investment access in the manufacturing sector have achieved "zeroing out."
The manufacturing industry is an important pillar industry of China's national economy.
The "zeroing out" of restrictions on foreign investment access in the manufacturing sector signifies a significant breakthrough in China's opening up to the outside world in the manufacturing sector.
This will further promote the deep integration of China's manufacturing industry with the global industrial chain and enhance the international competitiveness of China's manufacturing industry.
At the same time, the increased investment of foreign capital in the manufacturing sector will also drive the development of related industries and create more employment opportunities.
In recent years, China has continuously relaxed restrictions on foreign investment access, and has revised the national and free trade pilot zone negative lists for foreign investment access for five consecutive years from 2017 to 2021.
Among them, the restrictions in the manufacturing sector of the free trade pilot zone's negative list were the first to achieve "zeroing out" in 2021.
This revision extends this to the entire country.
As we all know, the manufacturing industry is the earliest field to open up in China, and it is also the field with the most sufficient market competition and the closest global industrial division of labor and cooperation.
Especially in the current environment where the trend of anti-globalization is rising, and unilateralism and protectionism are significantly increasing, the full cancellation of restrictions on foreign investment access in this field fully demonstrates China's active willingness to expand international cooperation, a clear attitude to support economic globalization, and a firm determination and position to promote high-level opening up.
China's open development means opportunities for countries around the world.
The "zeroing out" of restrictions on foreign investment access in the manufacturing sector, on the one hand, opens up a broader world for global investors to invest in China and share the development opportunities of China; on the other hand, the increasing opportunities for foreign investment in China also means that it will provide Chinese people with richer and higher-quality consumer choices.
Of course, for domestic manufacturing enterprises, foreign capital and domestic capital will fully enjoy the same treatment, and achieve fair "same field competition" in more fields, which also puts higher demands on their own competitiveness.
This will inevitably force manufacturing enterprises in various fields to pay more attention to practicing "internal skills" and get used to winning development opportunities in a more fully competitive market.
This is pressure, but also opportunity.
At present, a new round of scientific and technological revolution and industrial transformation is accelerating globally, and China continues to promote the transformation and upgrading of the manufacturing industry.
The entry of more foreign enterprises into the Chinese market will also provide Chinese enterprises with new experiences and references in terms of technology, concepts, and other aspects.
At the same time, it will bring more opportunities for open cooperation, mutual learning and exchange, and promote the convergence and flow of more high-end development elements.
Ultimately, it will also benefit the continuous improvement of the modernization level of China's manufacturing industry.
In this regard, Tesla's establishment of a factory in China, injecting the "catfish effect" into the domestic new energy vehicle market, is a representative case.
In fact, China's practice of reform and opening up has proven that foreign investment has always been an important force in participating in China's modernization construction and promoting the common prosperity and development of China's economy and the world economy.
It is also an important link for China to deeply integrate into the global economy.
The realization of China's industrialization and the establishment of its status as a manufacturing power are closely related to the continuous promotion of reform and opening up and international integration.
Achieving the upgrade from a manufacturing power to a manufacturing powerhouse is also inseparable from the assistance of a higher level of opening up.
It can be said that the full "zeroing out" of restrictions on foreign investment access in the manufacturing sector is both a response to the current development situation and a follow-up to the past successful development experience.
The matter is such a matter, with evidence and clear at a glance.
According to a message on the Ministry of Commerce website on September 8th, the Ministry of Commerce, the National Health Commission, and the National Medical Products Administration have recently jointly issued the "Notice on Carrying Out Pilot Work to Expand Opening Up in the Medical Field."
The "Notice" proposes to allow the establishment of wholly foreign-owned hospitals (except for traditional Chinese medicine categories, excluding the acquisition of public hospitals) in Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen, and the entire Hainan Island.
The specific conditions, requirements, and procedures for setting up wholly foreign-owned hospitals will be notified separately.
Among them, the proposal to allow the establishment of wholly foreign-owned hospitals in Beijing, Tianjin, Shanghai, Nanjing, Suzhou, etc., is particularly eye-catching.Access to medical care is a matter of life and health for hundreds of millions of people, and can be described as "the livelihood within livelihoods."
Therefore, foreign cooperation in China's medical field is relatively cautious.
For instance, there are mainly two types of hospitals in China: public and private.
The "2023 Statistical Bulletin on the Development of Health and Health in China" recently released by the National Health Commission shows that public hospitals account for 69.2% of hospital beds, while private hospitals account for 30.8%.
In terms of the number of beds, public hospitals occupy an absolute dominant position, which aligns with the public nature of China's hospitals.
Previously, China did not allow foreign investors to establish wholly-owned hospitals within the country.
However, it is important to recognize that there are many high-quality medical resources internationally.
There has always been anticipation about how to expand the opening up of the medical field and deepen international cooperation, so that these high-quality international medical resources can be utilized.
Now, three departments have issued a notice, intending to allow the establishment of wholly-owned foreign hospitals in some cities, which undoubtedly represents a significant step forward in opening up the medical field.
This is a pragmatic move that reflects the need for socio-economic development and demonstrates China's confidence and courage to expand openness.
Allowing the establishment of wholly-owned foreign hospitals, while utilizing foreign capital, can also allow more medical service concepts and technologies to enter China, serving the Chinese market and facilitating exchanges and cooperation between Chinese hospitals and advanced international hospitals.
Allowing the establishment of wholly-owned foreign hospitals and allowing foreign hospitals to participate in market competition can force public and private hospitals to improve medical services and technology, better serve patients, and thus promote high-quality development in the medical and health field.
In addition, it is also conducive to the reform of China's medical field itself.
The establishment of wholly-owned foreign hospitals is pioneering and may encounter some unprecedented problems.
That is why it is currently only being piloted in some cities, and this "slow and steady progress" model is beneficial for exploring experience and improving management models, and it is possible that it will be promoted in more places in the future.
It is worth mentioning that the notice also clarifies that in four areas such as the China (Beijing) Pilot Free Trade Zone, foreign-invested enterprises are allowed to engage in the development and application of human stem cell, gene diagnosis, and treatment technology.
All products registered and approved for production can be used nationwide.
These medical products and resources, like the establishment of wholly-owned foreign hospitals, can better serve the Chinese market.
Of course, for the domestic medical industry, there is no doubt that this is a key change where opportunities and challenges coexist.
The realization of "zero" restrictions on foreign investment in the manufacturing industry and the intention to allow the establishment of wholly-owned foreign hospitals in places like Beijing and Shanghai are actually important moves for China to reform and open up its domestic economic environment.
From the national perspective, the intention is not complicated: it is based on the current actual situation and needs of China's domestic economy, in order to expand the intensity of openness and attract more foreign investment.
The main benefit of opening up is to bring the "catfish effect."
What can openness introduce?
It will certainly introduce capital, products, technology, and management experience, but more importantly, it introduces a competitive mechanism, allowing domestic enterprises to make greater efforts for survival and development, enhancing industry vitality, and providing consumers with better products and services through industry competition.
Studies have shown that the more competitive a country's domestic market is, the stronger the international competitiveness of its enterprises.
Tesla is a prime example, and the "Action Plan for Solidly Promoting High-Level Opening Up and Attracting and Utilizing Foreign Investment with Greater Efforts" issued by the General Office of the State Council in March 2024 clearly states that it will continue to promote the opening up of fields such as telecommunications and medicine, carry out pilot programs to relax foreign investment access in the field of scientific and technological innovation, and expand the access of foreign financial institutions in the banking and insurance sectors.
This indicates that in the service industry fields such as telecommunications, medicine, and finance, China will also open its arms wider to the world.
China's comprehensive open posture and continuous forward-moving pace of opening up will also further strengthen the confidence of foreign investment in China and take root in China.
Of course, for many ordinary people, the opening up of the manufacturing industry may not feel much, but the trend of foreign hospitals has attracted high attention and discussion.
Many netizens are full of distrust towards foreign capital, always feeling that they will do a lot of bad things without bottom lines.
Some netizens support it, thinking that after foreign capital comes in, the rich can go there to consume, and they can also give the medical resources of public hospitals to ordinary people.
Clothing, food, housing, and transportation, birth, aging, and death, are all major events, and they are the economic fields with the highest attention to people's livelihoods, which can be understood.
However, looking from another angle, since the country has made the decision to welcome guests, some folk concerns do not have much significance to discuss.
More importantly, opening up is a completely different meaning from being kicked open by others.
Manufacturing, medicine, and in fact, the banking and insurance sectors that may follow in the future, are all pioneering fields for China's accelerated opening up of its economy.
Judging from the current situation, there will be more fields joining the ranks of opening up.
Rational prediction, banks, insurance, telecommunications, these industries and leading companies that can easily make money by lying in the comfort zone of China's domestic economic environment, may have to brace themselves to meet the direct and brutal challenges and competition of foreign enterprises in the open environment.
After all, with a population base of 1.4 billion and the world's second-largest economy, no industry or field would not want to share a piece of the cake in such a market.
For the introduction of foreign capital, the most important point at present is to see whether the country's subsequent rule design and regulatory review can form a stable balance with foreign capital and enterprises that want to obtain benefits in China.
Taking history as a mirror: each round of substantial promotion of reform and opening up has had a revolutionary impact on China's domestic economic environment, and this time is still worth looking forward to.
Source of image: Headline Picture Library.
First of all, regarding the attitude and determination of national reform and opening up, everyone should pay enough attention to these two latest trends.
China's 40-year history of reform and opening up can be divided into three stages, or three periods of reform.
The first period of reform was from 1978 to 1992; the second period of reform was from 1992 to 2012; and since 2013, it has entered the third period of reform.
Each period has brought revolutionary changes to the domestic economy, and the fate of many industries, companies, and individuals has also changed and been rewritten.
The year 2024 can be seen as the first year of a new round of reform and opening up.
From the domestic perspective, China has entered a new stage of development.
From the high growth that lasted for 30 years to reach or approach double digits, it has fallen below 7% and entered a "new normal."
In fact, the turning point began in 2010.
This indicates that the past growth driven mainly by exports and investment is unsustainable.
China's economic total has been very large, but the development is unbalanced and insufficient, facing the task of structural adjustment and industrial upgrading, that is, from quantitative growth to qualitative development.
From the international environment, the situation faced by China has undergone significant changes.
With the increase in China's economic volume, it inevitably changes the world trade and economic map, and contradictions and frictions are inevitable.
The positioning of the US policy towards China has shifted from "cooperator" and "stakeholder" to "main competitor," and its ultimate intention is to curb China's rise.
It should be clearly seen that the challenges faced by China are different from the past 30 years.
However, economic globalization will not reverse, and enough rationality should be maintained.
Since the reform and opening up in 1978, China has experienced an economic cycle every 9-11 years (an average of 10 years), and the leading industries and economic geographical centers of each cycle are obviously different.
Being sensitive, actively responding, and seeking opportunities is the right way.
Secondly, it is necessary to see the key demand behind this round of national reform and opening up, that is, to break the closed interest loop model that has been formed in the most critical domestic manufacturing and important fields related to people's livelihoods, as well as to tap and guide the vested interest groups.
Simply put, it is to make the groups that make easy money on the rules and market feel a sense of crisis.
If you stay in a comfort zone for too long, your bones will become soft, and under the skin, there is nothing but decay and filth.
This view is worth everyone's careful consideration, and it can only be hinted at.
Finally, whether it is manufacturing or hospitals, including the future possibilities of banks, insurance, and so on, the "catfish effect" brought by the introduction of foreign capital can break China's current domestic economic contraction dilemma, bringing more imagination and expectations.
For the vested interest groups and established models, the resistance to internal change has never been easy.
Driving the wolf to swallow the tiger, introducing competitive forces from the outside to activate the whole situation is the country's open card.
For the country's attitude and attempts, for ordinary people, it is definitely a good signal.
Next, the revitalizing effect that the opening up to foreign capital can bring to China and the prospects for breaking through and changing the situation are worth looking forward to.
The above is a special sorting and analysis discussion of the two latest important trends of China's increased reform and opening up.