BEIJING – Chinese Premier Li Qiang stepped up his pursuit of foreign investors, pledging to allow overseas companies more access to China’s vast market, while downplaying concerns about the health of the economy.

China will also cultivate emerging industries such as biomanufacturing and develop “quality productive forces”, he said on March 24, referring to the country’s latest economic buzzword – a collective term for its high-tech sectors such as artificial intelligence, aerospace technology and electric vehicles.

President Xi Jinping coined the phrase in September 2023 during an inspection tour of Heilongjiang province in China’s rust belt region in the north-east, and it quickly caught on among policymakers in discussions about the country’s economic future. 

“We welcome companies from all countries to invest and deepen their foothold in China,” Mr Li said in his 30-minute keynote address at the opening session of the China Development Forum, a high-level engagement platform for top business leaders and senior Chinese policymakers, in Beijing. 

Mr Li’s latest assurance to overseas investors comes as foreign direct investment into China hit a low in 2023, and confidence in doing business declined during the Covid-19 pandemic.

Data from the State Administration of Foreign Exchange in February showed that China’s foreign direct investment liabilities in its balance of payments – a measure of new foreign investment into the country – were US$33 billion (S$45 billion) in 2023.

The measure, which tracks monetary flows linked to foreign-owned entities in China, plunged 82 per cent in 2023, compared with 2022, and is at its lowest level since 1993.

Mr Li acknowledged that companies have raised concerns about the slump in China’s property market sector and the high debts that local governments are facing, but added that “the difficulties and problems are not as serious as people think”.

Measures to contain their risks have been effective, he added.

Beijing has also been carefully studying issues that foreign companies in China have raised, such as cross-border data flow and limited market access, Mr Li said. New regulations will be rolled out to address investors’ concerns, he added.

Foreign companies, particularly those from the United States and Europe, have been worried about how China’s slew of new laws on anti-espionage and information transfer, as well as the 2017 data privacy law, will affect their operations.

Mr Li said his government had addressed “some worries” but “for others, we are still working on solutions”.

On March 22, Beijing started loosening some data transfer restrictions to make it easier for companies to shop and ship across borders and make payments, among other operations. 

Mr Li also listed measures to boost domestic demand in 2024 that include reducing barriers to a unified domestic market and urbanising its rural areas, as well as a campaign to encourage consumers and businesses to upgrade their household appliances and cars.

China is seeking to maintain its growth momentum from 2023, by aiming to expand by about 5 per cent in 2024.

Analysts have said that the latest goal will be difficult to hit, given the current size of China’s economy, its existing problems and the absence of the low base in 2022. China’s economy grew by 5.2 per cent in 2023.

International Monetary Fund managing director Kristalina Georgieva said in her speech at the forum that China could grow considerably faster – by 20 per cent or an additional US$3.5 trillion in the next 15 years – with a comprehensive package of pro-market reforms.

These measures would include expanding the social security system and raising pensions in a fiscally responsible way to boost residents’ spending power, which the country needs in its next stage of growth, she said.

Steps to reduce wastage from unfinished housing construction – the result of defaults by debt-laden developers – will also help, she added.  

“China faces a fork in the road. (It can either) rely on the policies that have worked in the past, or reinvent itself for a new era of high-quality growth,” Ms Georgieva said. 

About 110 delegates representing multinational companies, international organisations and academics are attending the two-day forum that ends on March 25. 

Attendees include Apple chief executive Tim Cook, Asian Development Bank president Masatsugu Asakawa and US-China Business Council president Craig Allen. 

The annual forum was first held in Beijing in 2000.