The guidelines are seen as a response to the economic downturn and the decline in FDI rates. Geopolitical tensions and high government control have contributed to foreign investors’ hesitation to invest in China. FDI into China fell by 2.7% year on year from January to June.
These measures could also be a reaction to the US investment ban, which restricts US investments in critical technology sectors in China. The move may help counterbalance the effects of the ban.
