|Top economic meeting bodes well for foreign firms in China despite cautious outlook|
While the Chinese economy will continue to face downward pressure in 2017, a recent meeting of the nation's top economic policymakers painted a brighter picture for both domestic and foreign companies, with business conditions expected to improve and new investment opportunities likely to surface, experts said Sunday.
The Central Economic Work Conference, which ended on Friday, stressed the need to continue to deepen overall economic reforms and vowed to improve market conditions to help business by further expanding market access, streamlining administrative restrictions and easing their financial burden.
Attended by top economic policymakers, including President Xi Jinping and Premier Li Keqiang, the conference was meant to set the priorities for next year's economic development agenda.
The conference reaffirmed the government's commitment to continue supply-side reforms to cut overcapacity, help companies reduce leverage and financial burden, create a law-based environment and boost efforts to attract foreign investment, the Xinhua News Agency reported on Friday.
Good news for firms
"This is good news for companies, both domestic and foreign," Wang Jun, deputy director of the Department of Information at the China Center for International Economic Exchanges, told the Global Times on Sunday. "This year's conference mostly reaffirmed earlier reform commitments, but fresh vows to step up reform efforts next year will have an impact on companies' bottom lines directly and indirectly."
While the government's commitment to stabilize the economy through policies will provide a sound investment environment for companies, including streamlining restrictions and expanding market access, its vow to reduce costs for companies through cuts on taxes and administrative fees will directly help companies, according to Wang.
Next year's government economic development agenda is to stimulate the market, improve the quality and effectiveness of supply and to create demand, which will present many opportunities for companies at different development stages, said Jiang Zhen, a research fellow at the National Academy of Economic Strategy at the Chinese Academy of Social Sciences.
"As the government tries to further stimulate the market, companies will benefit from it because Chinese purchasing power still holds great potential with proper policy support and high-quality goods," Jiang told the Global Times.
However, companies have to adjust to changes in the Chinese economy and adopt appropriate strategies to seize on such opportunities, Jiang added.
Other opportunities could also arise as the government tries to carry out projects under "the Belt and Road initiative," experts said, noting that domestic companies could seek investment opportunities in countries along the route.
However, a dim outlook remains for the world's second-largest economy, especially in terms of foreign trade, as protectionist sentiments continue to grow overseas and China faces increased trade remedy measures for its exports, experts also said.
"Foreign trade showed some positive signs in the second half of the year, supported mostly by slight improvements in global demand and the steep depreciation of the yuan against the US dollar," Wang said.
But the global trade outlook is "not so bright" and the yuan will unlikely depreciate at this year's pace, because the dollar might peak and depreciate next year, according to Wang.
Another challenge is growing trade disputes, amid rising protectionist sentiment among major trading partners like the US and the EU, which is only expected to worsen, experts pointed out.
Though the conference did not discuss next year's trade policy, and focused instead on domestic issues, China's trade will face tremendous pressure next year, Wang said.
There is little China can do but improve domestic economic conditions, he said. "We are in a defensive position and we can't change other countries' policies, but we can improve [our economy] and better protect our interests."