London Daily

Focus on the big picture.
Friday, Oct 03, 2025

China's moves to boost foreign business also help Chinese companies

China's moves to boost foreign business also help Chinese companies

China is making historic strides to increase foreign access to its local markets, moves which some analysts say are changes Chinese companies need in their own development to becoming global players.

“To me what is key about the opening is where it comes from: China is looking to globalize its market, not necessarily liberalize it,‘’ said Chantal Grinderslev, partner at Shanghai-based investment management consulting firm Z-Ben.

Lester Ross, chair of the policy committee of the American Chamber of Commerce in China, said he expects foreign companies could likely gain 10% to 20% of the Chinese market, but it’s a question whether the businesses could capture much more than that.

The Chinese government’s latest efforts to make it easier for foreign businesses to operate locally come as China’s own companies seek to be global players.

China pushed ahead this month with long-awaited announcements for removing foreign ownership limits in major parts of the financial industry. Some foreign business organizations also said this month that they are encouraged by the draft rules for implementing China’s new foreign investment law, which takes effect Jan. 1.

While the moves come amid pressure from the U.S. on trade, some analysts point out how such changes help China achieve its own development goals, which may not jibe with the vision many foreign organizations have for a more market-oriented system.

“To me what is key about the opening is where it comes from: China is looking to globalize its market, not necessarily liberalize it,‘’ said Chantal Grinderslev, partner at Shanghai-based investment management consulting firm Z-Ben. She added that difference will affect how companies - in her case, financial firms - choose to expand into China.

There are also limits to how much of the Chinese market foreign businesses can tap, now that the Asian country has grown into the world’s second largest economy. In terms of trade, technology and capital, the world has increased its exposure to China between 2000 and 2017, while the Asian giant has reduced its exposure to the rest of the world since 2007, McKinsey Global Institute said in a report this summer.

Lester Ross, chair of the policy committee of the American Chamber of Commerce in China, said he expects foreign companies could likely gain 10% to 20% of the Chinese market, but it’s a question whether the businesses could capture much more than that.

Foreign banks still have less than 2% of the market, despite having been able to operate in China for more than a decade, analysts pointed out.

In the meantime, the entrance of foreign financial institutions could help Chinese individuals and companies get better access to global markets, said Ross, who is also partner at law firm WilmerHale. For example, he noted, “There are weaknesses in the Chinese regulatory system that hurt the ambitions of the Chinese financial institutions in the U.S.”


Chinese also want better IP protection

Another area in which China is responding to foreign business complaints is intellectual property protection.

“One of the reasons this is changing is because you have Chinese companies starting to acquire international brands that are valuable as well,” said Andrew McGinty, a Hong Kong-based partner at law firm Hogan Lovells.

China could still do more to show how serious it is about intellectual property protection, McGinty said. But he noted efforts such as a clause in the draft rules for implementing the new foreign investment law that requires the removal of trade secrets when officials exchange documents internally.

The foreign investment law was passed in March and aims to improve intellectual property protection, prevent forced technology transfer and put overseas companies on equal footing with local players.

“This is probably the single biggest burst of opening since foreign investment was allowed in China (in roughly the 1980s),” McGinty said.

After the Communist Part of China took control of the country in 1949, the economy was essentially closed to foreigners until 1978, when former Chinese leader Deng Xiaoping spearheaded a restructuring known locally as “reform and opening up.” China’s international business also increased after the country joined the World Trade Organization in 2001, despite criticism that Beijing has been slow to follow through on commitments to reduce government control. Critics add that after Xi Jinping assumed power in 2012, initial efforts at increasing market-oriented policies have been reversed.

U.S. President Donald Trump has stepped up pressure on China to buy more American products and address long-standing business complaints about unequal market access. Since last summer the Trump administration has applied tariffs on billions of dollars’ worth of Chinese goods and placed several prominent Chinese technology companies on a blacklist that essentially prevents them from buying from their American suppliers. China has retaliated with tariffs of its own on U.S. goods and threatened the release of an “unreliable entities list.”

Just hours before Trump and Liu He, China’s top trade negotiator, held their press conference at the conclusion of high-level trade talks earlier this month, the China Securities Regulatory Commission announced foreign entities could take full ownership of futures companies beginning Jan. 1. Foreign companies can also take control of mutual fund management companies beginning April 1 and securities companies from Dec. 1, 2020, the regulator said.

Among other measures, China last week also announced new regulations for improving the business environment.

“China today is much better than it was 30 to 40 years ago,” said Xiaodong Lee, founder and CEO of Fuxi Institution, a consultancy on internet development in China that promotes cross-border connections.

Lee encouraged foreigners to come see China for themselves and to take advantage of an environment that is still developing, despite its differences from the U.S.

“In China (foreign businesses) can make money, and China also hopes the foreign companies can make more money,” Lee said, according to a CNBC translation of his Mandarin-language remarks.

American companies and their affiliates make far more money in China than that of their Chinese counterparts in the U.S., research firm Gavekal Dragonomics said in a report in August. The firm’s analysis showed that in 2016, American business sales in China topped $450 billion, while the Chinese sales in the U.S. were less than $50 billion.

Newsletter

Related Articles

0:00
0:00
Close
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
×