Update on Business Environment and Investment Opportunities in China 2023
“With the optimization of pandemic prevention and control measures, China's economic vitality is gradually being released. The 2023 Two Sessions have set the main targets of development and indicated the direction for foreign trade and Sino-foreign cooperation. This article helps Chinese, foreign companies and investors understand the latest policy orientation, macroeconomic and strategic planning of the Chinese market, thus better respond to challenges and seize opportunities 随着疫情防控政策优化调整，中国经济活力正逐步得到释放。2023年的两会为今年的发展设定了主要预期目标、为外贸工作及中外合作指明了方向。本文帮助中外企业及投资者了解中国市场最新政策导向、宏观经济和战略规划的重要风向标，更好的把握变化、机遇和应对挑战”
1. GDP growth of around 5%;
2. A goal of 3% for the CPI, and a 5.5% unemployment rate for people in cities with the creation of around 12 million new urban jobs.
3. Promote the stability and quality of import & export, as well as the basic balance of payments;
4. Keep grain output above 1.3 trillion catties;
5. Focus on fossil energy consumption control and steadily improve the quality of the ecological environment, emission of major pollutants continues to decline
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The two sessions delivered the message of policy focus on stabilizing economic growth. The report put the expansion of domestic demand as the top priority and consumption promotion as the main effective means. Industrial policy focuses on the development of manufacturing and digital economy. Foreign trade policy mainly focuses on three aspects: expand the market, institutional opening up and bring forth new business forms. After the two sessions, the "exhibition matrix" such as the consumption Expo, the Import Expo and the Canton Fair is expected to be fully restored. 两会向我们传递了稳增长政策、以促进消费为主要抓手，报告将扩大内需提至首位；产业政策方面集中关注制造业与数字经济的发展；外贸政策将主要集中在开拓市场、扩大制度型开放以及创新业态三个方面，重点帮助外贸企业解决原材料、用工、物流等难题。两会后，消博会、进博会、广交会等“展会矩阵”有望全面恢复。
The vigorous development of new forms of consumption and digital consumption networks 新型消费蓬勃发展促进数字化消费网络建设
The report addressed that household income should be increased through multiple channels, the income distribution system and the consumption ability should be improved. To promote the deep integration of online & offline consumption and the recovery of life service consumption, a major move is the strategic synergy with digital China. China will take measures such as reducing vehicle purchase taxes to promote the consumption of new energy vehicles, carry out revitalization and promote green smart home appliances in the rural areas, also promote rigid and improved housing demand to ensure people's livelihood. 报告指出，要多渠道促进居民增收，完善收入分配制度，提升消费能力。推动线上线下消费深度融合，促进生活服务消费恢复，未来新型消费的一大看点就是同数字中国的战略协同。采取减免车辆购置税等措施促进新能源汽车消费，开展绿色智能家电下乡、乡村振兴和推进刚性和改善性住房需求等稳民生工作。
Digital economy is still a hot topic 数字经济依然是2023两会的热点话题
At 2023 two sessions, the words "cutting age technology" such as AI, ChatGPT, humanoid robots, and autonomous drive frequently appear. The report addressed vigorously development of the digital economy by accelerating the digital transformation of traditional industries and SMEs, striving to improve the high-end, intelligent, green transformation, upgrading regular supervision, and supporting the development of platform economy. China will promote the deep integration of the digital and the real economy, build a modern industrial system, and promote the integrated development of strategic emerging industrial clusters. By promoting deeper integration of modern services with advanced manufacturing, the digital economy will drive the further development of manufacturing sector. 2022年数字经济、智能制造、算力芯片、工业互联网、元宇宙等“科技创新”热点异彩纷呈，今年的建议与提案中，AI、ChatGPT、人形机器人、自动驾驶等“前沿科技”的词汇高频出现。报告指出2023年要大力发展数字经济，加快传统产业和中小企业数字化转型，着力提升高端化、智能化、绿色化水平，提升常态化监管，支持平台经济发展。促进数字经济和实体经济深度融合，建设现代化产业体系，推动战略性新兴产业集群融合发展。以数字经济为制造业注入动能、推动现代服务业同先进制造业深度融合。
Carbon peak and carbon neutrality continue to be the focus 双碳（碳达峰碳中和）继续成为两会焦点
In the 2023 report, carbon neutrality continues to be an important part, and green finance has a sustainable significance for promoting the green transformation of society.在2023年报告中，“双碳”继续成为重要组成部分，绿色金融对推动社会绿色转型有着可持续发展的重要意义。
Preferential Fiscal and tax policies will further empower business entities 财税政策红利将进一步赋能经营主体
The report called for implementing “prudent monetary policy”. To stimulate market vitality, transfer payments from the central government to local governments will be substantially increased to about 70% by 2023. China will guide financial institutions to increase the availability of credit and reduce financing costs. The average interest rate on corporate loans has fallen to the lowest level in record. China will implement large-scale tax and fee reduction policies, such as reducing the 17% value-added tax rate to 13% and the effective minimum income tax rate for small and micro entities from 10 to 2.5%.数据显示2022增值税留抵退税超过2.4万亿元，新增减税降费超过1万亿元，缓税缓费7500多亿元。2023为激发市场活力，中央对地方转移支付将大幅增加至70%左右。引导金融机构增加信贷投放，降低融资成本，企业贷款平均利率降至有统计以来最低水平，重点纾解企业生产经营和融资困难，中小微企业和个体工商户将普遍受益。实施大规模减税降费政策，如将17%的增值税率降至13%，小微企业所得税实际最低税率从10%降至2.5%等。
In both the government's budget report and the review report of the Financial and Economic Committee of the National People's Congress, the scope of comprehensive income tax collection the special additional itemized deduction standards is to be improved. This means that a new round of tax reform are most likely on the horizon. 在政府预算报告和全国人大财经委审查报告中，均提及优化个人所得税综合所得征收范围、完善专项附加扣除项目和标准。这意味着新一轮个税改革可能箭在弦上。
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Prospects of Sino-foreign cooperation and foreign investment in China
中外合作及外资在华的机遇展望
In the first month of 2023, the actual use of foreign capital in China totaled 127.69 billion yuan, up 14.5% year-on-year, and the market potential continues to be attractive for foreign investment. This year, global competition became more intense with the downturn of global economic and trade growth. Stabilizing foreign trade and investment remains the top two tasks as important support for China economic growth, will. The Government work report put forward a series of targeted measures to increase efforts to attract and utilize foreign investment. 2023年首月，中国实际使用外资金额1276.9亿元，同比增长14.5%，持续成为外商投资兴业的热土。今年世界经济贸易增速放缓，国际竞争将更趋激烈，稳定外贸和外资作为经济增长的重要支撑、依然是如今的两项重点工作。政府工作报告提出了加大力度吸引和利用外资的系列针对性举措。
Key measures such as implementing the Regional Comprehensive Economic Partnership Agreement (RCEP) and other free trade agreements, improving tariffs, import & export tax and tax rebate policies, and expanding the import of advanced technologies, important equipment, energy resources related products indicated the direction for foreign trade work in the report. Executives of foreign companies in China,such as Executive VP Zhang Xiqiang from Nestle Group，Global VP Zhang Wenyi from Amazon and CEO Zhang Xiaoyu from AIA Life have expressed strong confidence in China's economic development and continued to be optimistic about investment and development in the Chinese market. The latest 2023 U.S. Chamber of Commerce study results showed that 74% of U.S. companies remain in China, the importance and winning potential of the Chinese market continue to attract member companies.报告提出的“深入实施《区域全面经济伙伴关系协定》等自贸协定”，“完善关税、进出口环节税收和退税政策”，“扩大先进技术、重要设备、能源资源等产品进口”等重点为今年外贸工作指明了方向。广大在华外企如雀巢集团执行副总裁张西强、亚马逊全球副总裁张文翊、友邦人寿首席执行官张晓宇等众多在华外企高管纷纷表示对中国经济发展信心强，持续看好在中国市场的投资与发展。最新的2023年美国商会研究结果显示，74%的美国公司留在中国，中国市场的重要性和赢得的潜力继续吸引着会员公司。
On March 14, the newly elected China’s premierLi Qiang talked about China-Us relations at a press conference, saying that both sides have benefited from each other's development, sending a signal that China-Us cooperation has big potential. In addition, The Department of Consular Affairs of the Chinese Ministry of Foreign Affairs has issued a circular to adjust the visa and entry policies for foreigners to further facilitate the exchange of Chinese and foreign personnel from March 15, 2023. 3月14日，李强总理在记者会上谈中美关系，称彼此都从对方的发展当中受益，释放了中美合作大有可为的信号。外交部领事司发布通告决定自北京时间2023年3月15日零时起，就外国人来华签证及入境政策调整，进一步便利中外人员往来。
2023 economic work priorities are to facilitate high-quality development and expand consumption. Leading the digital future along with green economy is the way for foreign investors to open up a new pattern of exploration in the Chinese market. In the face of fierce market competition, the two sessions are undoubtedly an important resource for foreigncompanies’ deep understanding of China's market orientation. Following the guidance, carry out adaptation and serve the local market will playimportant part for foreign companies winning strategy in their global operation. 2023年经济工作重点是促进高质量发展，扩大消费主线。以绿色经济牵引数字化未来是跨国企业打开新格局的探索之路，面对激烈的市场竞争，两会无疑是加深外资企业对中国市场经济宏观了解的重要桥梁。跟随政策，做好全球化运营与企业赋能创新，进行本土化融合、服务好本地市场是外资企业发挥优势的重要举措。
Data released by the National Bureau of Statistics on March 15 showed that the PMI of the manufacturing and service industries had rebounded to recent highs in February. From perspective of demand side, consumption and investment were improving, employment and commodity prices were generally stable, and the CPI increased by 1.5% YoY.Overall, the development of market is expected to improve, and vitality tends to increase. While the world is facing complex environment, impact of geopolitical and other uncertainties, let us look forward to the further integration of digital economy and modern industry, embrace new opportunities and business growth after the two sessions in 2023. 国家统计局3月15日发布的2023前两个月数据表明，2月份制造业和服务业PMI已经回升达到了近期高点，从需求来看，消费和投资都在改善，就业和物价总体稳定，居民消费价格同比上涨1.5%。总体来看，市场主体发展预期改善、活力趋于增强。在世界经济增长趋于放缓、国际环境依然复杂，地缘政治等不确定因素冲击的2023年让我们一起来关注数字经济与现代产业的进一步融合，期待两会后新的投资发展机遇和业务增长。
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