Research & Analysis

Senior Chinese policymakers are once again signaling their embrace of the foreign business community with a new action plan for boosting foreign investment in China. The plan marks a focused government effort to incentivize more foreign participation in the China market and identifies a range of investment opportunities in mostly services sectors.

The Chinese People’s Political Consultative Conference will begin on March 4, followed by the National People’s Congress (NPC) on March 5. Together, these meetings—known as the “two sessions”—serve as China’s most important annual political event, shaping the direction of national economic and social policy.

The Shanghai Free Trade Zone (FTZ) and associated Lingang New Area recently introduced the first batch of general data negative lists for cross-border data transfers (CBDTs). The lists cover both “personal information” and “important data” in reinsurance, international shipping, retail, catering, and hospitality.

China has developed a sophisticated set of retaliatory tools that it is utilizing with greater frequency and severity as trade and technology competition with the United States intensifies. Policymakers in China do not publicly define these tools as intrinsically retaliatory.

Late last year, China’s State Administration for Market Regulation (SAMR) released a draft implementation plan for the Regulations on Fair Competition Review (RFCR)—a regulatory overhaul reflecting a decade-long push to ensure that government policies are non-discriminatory and comply with fair competition principles.

Last month, preferential procurement of low-priced medical products under China’s volume-based procurement (VBP) system reignited public debate over the right balance between quality and affordability in the healthcare system. This procurement was prominent during the country’s 10th round of VBP for drugs and 5th round for high-value medical consumables in December.

China on Tuesday announced new tariffs and export controls in response to the United States imposing a 10 percent tariff, on top of existing tariffs, on all Chinese imports. Despite speculation that President Donald Trump and President Xi Jinping would speak by phone this week and potentially ease their respective tariff rulemakings, a call has not taken place and Trump indicated on Tuesday that he was “in no hurry” to do so.

On February 1, President Donald Trump followed through on his plan to impose an additional 10 percent tariff on all imports from China, effective Tuesday. He also imposed a 25 percent tariff on most imports from Canada and plans to impose tariffs on imports from Mexico at the same rate next month.

President Donald Trump’s Cabinet is aligned on a need for more tariffs, though the administration has yet to outline exactly when and how to do so, including determining which products and countries to target, as well as how high to set the duties. White House Press Secretary Karoline Leavitt indicated this week that Trump plans to levy tariffs on Mexico and Canada on February 1 and that he is still “considering” imposing a 10 percent tariff on all Chinese goods on the same day.

Since our last update, the United States and China have continued engaging in dialogue over IP protection to address business concerns, including the vice-ministerial meeting during the second Commercial Issue Working Group in Tianjin last September. Several critical issues impacting American rights holders—such as patent term extensions, regulatory data protection, and trade secret protection—were discussed during both high-level and technical exchanges.