MNI POLICY: China To Boost Foreign Participation In Services

Chinese authorities are preparing new policies to expand service-sector market access as Beijing seeks to attract more foreign direct investment while emphasising the need to strengthen comparative advantage in trade with key partners, MNI understands.

The opening will target telecommunications, healthcare, cloud computing, biotechnology and foreign-invested hospitals, with officials pledging deeper access and a more level playing field for foreign enterprises.

Advisors close to decision-makers have called for stronger implementation of the negative list, which details sectors off limits to foreigners, for cross-border service trade and for removing legal inconsistencies that create ambiguity around market entry in order to achieve no restrictions outside the list. They also recommend giving free trade zones, particularly the Hainan Free Trade Port, greater autonomy to pilot reforms that can be replicated nationwide. 

Aligning domestic rules with high-standard frameworks such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement is also viewed as essential, alongside active engagement in negotiations on services, digital trade and e-commerce to improve China’s participation in rule-setting, especially in emerging industries. 

Foreign capital utilisation reached CNY621 billion in the first 10 months of the year, down 10.3% y/y, after hitting the lowest level since 2013 in 2024, Ministry of Commerce data showed. Officials attribute the decline to uncertainty stemming from the U.S.’s extensive tariff measures, which have dampened global investment sentiment.

COMPARATIVE ADVANTAGE

Authorities stressed the need to view trade through the lens of long-term comparative advantage, noting that the U.S. exports around 80% of its semiconductor revenue, Germany sells 80% of its cars overseas and Japan exports about half of its auto production. 

Officials also pointed to a stable outlook for German investment in China, with many German firms expanding cooperation with Chinese partners in key industries after decades of engagement. (See: MNI INTERVIEW: China Emerging As German Firm’s Export Base)