Shu Jueting: Friends from the press, good afternoon. Welcome to the press briefing of the Ministry of Commerce (MOFCOM). Recently, the General Office of the State Council communicated Measures of MOFCOM and the Ministry of Science and technology (MOST) for Further Encouraging Foreign Investment in Establishing Research and Development (R&D) Centers (“the Measures”). To help you better understand this document, we invite Mr. Chen Chunjiang, Assistant Minister of Commerce, and Mr. Wu Jiaxi, Deputy Director-General of the Department of Research Commercialization and Regional Innovation of MOST, to share relevant information and answer your questions.

Now, I would like to invite Assistant Minister Chen Chunjiang to make his opening statement.

Chen Chunjiang: Friends from the press, good afternoon.

Recently, the General Office of the State Council communicated Measures of MOFCOM and MOST for Further Encouraging Foreign Investment in Establishing R&D Centers. Today, my colleague and I would like to share some information about the Measures.

The Central Committee of the Communist Party of China (CPC) and the State Council put great store by bringing in foreign investment for scientific and technological innovation. General Secretary Xi Jinping has reemphasized China’s unswerving resolve to expand high-level opening-up, stressing that China’s door to the outside world will only open even wider. The report to the 20th CPC National Congress called for high-standard opening-up, broader science and technology exchanges and cooperation with other countries, and an open and globally-competitive innovation ecosystem. The 2022 Central Economic Work Conference demanded greater efforts in attracting and utilizing foreign investment.

To implement the decisions of the CPC Central Committee and the State Council, MOFCOM and MOST conducted preliminary research and analysis and, together with 21 departments including the Publicity Department of the CPC Central Committee, the Cyberspace Administration of China and the National Development and Reform Commission, put forward 16 policies and measures in four categories, in order to increase support for foreign-invested R&D centers and help foreign investors participate in China’s innovation-driven development and share in the opportunities of China’s high-quality development.

First, support for scientific and technological innovation. With regard to optimizing innovation-related services, the Measures call for implementation innovation-supporting tax policies, better guidance and service in application for and accreditation of new- and high-tech enterprises, and more input to enhance policy awareness and guidance. With regard to encouraging basic research, the Measures propose support for foreign-invested R&D centers in using large research instruments, scientific and technological reports and related data, and in infrastructure, purchase of equipment, talent services and funding. With regard to coordinating innovation efforts of enterprises, universities and research institutes, cooperation is encouraged among higher education institutions, research institutes, vocational schools and foreign-invested R&D centers in technology breakthroughs, technological collaboration, training bases and joint laboratories. With regard to supporting the development of open innovation platforms, guarantee of land, equipment, infrastructure and other factors will be strengthened, and modes of registration, such as “one address, multiple licenses” and clustered registration, are available to enterprises established on the platforms. With regard to improving financial support for innovation, local commercial authorities are required to launch bank-business matchmaking activities. With regard to facilitating participation in government projects, foreign-invested R&D centers are encouraged to take part in national science tasks and major national science programs and projects.

Second, greater R&D facilitation. On cross-border data flow, security management will be strengthened to ensure secure and orderly flow of R&D data. On outward transfer of intellectual property rights (IPR) and technology import and export, local authorities will be instructed to make institutional preparations, align mechanisms and optimize procedures for outward IP transfer, and facilitation will be considered for intra-company cross-border technology transfer in multinational corporations. On customs clearance and supervision of research supplies, quarantine and review arrangements will be offered, and support will be given for extending re-exportation period for key research equipment and test vehicles.

Third, incentives for attracting overseas talents. On making it easier to work in China, residence for work may be applied as a team, and procedures for work permit adjustment or renewal will be optimized. On applying for professional titles, a “green channel” will be provided for high-end and much-needed overseas talents, for whom seniority and years-of-experience requirements will be relaxed, and overseas work experience, performance and achievements may be taken into account in accreditation. On awards and grants, local authorities are encouraged to offer support for housing, children’s education, spouse’s work and healthcare and to provide grants to key R&D projects of industry-leading talents and their teams. On cross-border transaction, convenient arrangements will be implemented for overseas talents in foreign-invested R&D centers.

Fourth, better IPR protection. For business secrets, the Measures require further clarification as to the scope of protection, actions of infringement and legal liabilities, improved infringement procedures, and more effective judicial protection. On services, the rapid and coordinated protection mechanism will be further enhanced, and IPR protection centers will be upgraded to provide one-stop services covering swift review, determination of rights and rights protection. On enforcement, the punitive compensation system will be fully implemented, and special enforcement actions against IPR infringement will be carried out.

Going forward, MOFCOM, MOST and related authorities will fully implement the decisions of the CPC Central Committee and the State Council, by expeditiously putting the Measures in place in full through collaboration across different sections and at all levels. This will encourage foreign investors to build more China-based R&D centers, boost their development, and enable their greater role in advancing innovation and achieving high-quality development. Thank you.

Shu Jueting: Thank you, Assistant Minister Chen Chunjiang, for your introduction. Now, we move on to the Q&A session. Please identify yourself first and make sure that your questions are relevant to the theme of our press briefing. The floor is open.

CMG: We notice that the Measures cover the four areas of scientific and technological innovation, making research and development easier, attraction of overseas talents and protection of IPR. Then why should we highlight these four areas? How will these 16 measures substantially promote the development of foreign-invested R&D centers?

Chen Chunjiang: In recent years, facing drastic changes and a pandemic both unseen in a century, the CPC Central Committee fully assessed the situation, efficiently coordinated epidemic response and economic and social development, made a strategic deployment of “stabilizing the overall performance of foreign trade and foreign investment”, and introduced a series of policies and measures to keep foreign investment stable, with solid results. At the same time, due to the impact of multiple factors, we are deeply conscious of various challenges for China in utilizing foreign investment. The report to the 20th CPC National Congress pointed out that it is necessary to promote high-standard opening up and improve the level and quality of trade and investment cooperation. The 2022 Central Economic Work Conference proposed to broaden international cooperation on science and talents, strive to form an open ecosystem for innovation with global competitiveness, attract and make the most of high-end innovative talents, and attract more global factors and resources for innovation.

Foreign-invested R&D centers are an important part of China’s scientific and technological innovation system, which has contributed to introducing international cutting-edge technologies and high-end talents, and improving industrial technologies and abilities for scientific and technological innovation, and also effectively promoted the rapid development of global industrial and innovation chains. In order to support the development of foreign-invested R&D centers, it is necessary to introduce more targeted and effective policies and measures. MOFCOM and MOST, together with relevant departments, followed the goal-oriented and problem-oriented approach, conducted extensive and in-depth research, conducted full assessment, and put forward 16 measures in four areas. The Measures are practical and effective tools to help foreign-invested R&D centers develop in China.

First, they can improve the development environment for foreign-invested R&D centers. When formulating and doing research for these policies, foreign-invested R&D centers put forward some common requests facilitating development, such as facilitating the work of foreigners, obtaining financial support, better access to government projects, and strengthening IPR protection. Focusing on these common requests, the Measures allow teams to apply for work permits and work-related residence permits in groups, accept written affidavit of compliance, and accept available materials first and allow for complement later. The Measures also promote the facilitation of cross-border collection and payment of funding for overseas talents, encourage financial institutions to provide financial support for scientific and technological innovation and basic and cutting-edge research in foreign-funded R&D centers, support foreign-invested R&D centers in participating in the development of platforms on the application of R&D achievements, innovation and entrepreneurship, and set up post-doctoral research centers. The Measures also propose pilot programs for publishing project plans in several languages, give play to the role of the administrative ruling system for patent infringement disputes, enhance the enforcement of administrative rulings, and continue to launch special campaigns against IPR infringement to help continuously optimize the R&D and innovation environment.

Second, they can help leverage the role of foreign-invested R&D centers in global innovation resource allocation. Foreign-invested R&D centers connect domestic and overseas innovation systems, with frequent international talent exchanges and scientific and technological cooperation. Some multinationals need to allocate innovative resources and R&D achievements efficiently through their global scientific research teams. To this end, the Measures proposed to actively enroll scientific and technological experts from foreign-invested R&D centers into national and relevant local scientific and technological expert databases to participate in the consultation, evaluation and management of scientific and technological projects. The Measures also proposed to effectively conduct safety assessment on important data and personal information for their cross-border transfer, improve the system related to the outbound transfer of IPR ownership, and optimize the technology import and export management procedures. For foreign-invested R&D centers to introduce imported genetically modified organisms and biological materials of animals and plants for national and provincial scientific research projects, approval for inspection and quarantine will be facilitated. Overseas talents are encouraged to declare professional titles. The Measures also incentivize and provide more funding for overseas talents, in order to help foreign-invested R&D centers pool global high-quality innovation resources.

Third, they could enable foreign-invested R&D centers to release the drivers of industrial upgrading. Foreign-invested R&D centers are institutions engaged in scientific R&D and experiments. Further integration into the local scientific research and innovation system could enhance their R&D capabilities and core competitiveness. To this end, the Measures proposed to support foreign-invested R&D centers in using large-scale scientific research instruments, and scientific research reports and related data of major national science and technology projects in accordance with law. The Measures encourage colleges and universities, scientific research institutes and foreign-invested R&D centers to cooperate in technical research, support foreign-invested R&D centers in carrying out technical cooperation with vocational schools, setting up training bases, and jointly building technology and skills innovation platforms such as joint labs. The Measures support the establishment of R&D centers as open innovation platforms, and integrate technology, talents, capital, industrial chain and other resources with enterprises, universities and research institutes to achieve collaborative innovation and help improve the scientific research innovation and application capabilities of foreign-invested R&D centers. Thank you.

Xinhua News Agency: The report to the 20th CPC National Congress pointed out that China would expand science and technology exchanges and cooperation with other countries, cultivate an internationalized environment for research, and create an open and globally-competitive innovation ecosystem. What is MOST’s view on the role of encouraging foreign-invested R&D centers in creating an open and globally-competitive innovation ecosystem?

Wu Jiaxi: The plans and requirements of creating an open and globally competitive innovation ecosystem in the report to the 20th National Congress of the CPC fully demonstrate China’s determination to deeply integrate into the global innovation network, and point out the direction for promoting higher level of cooperation on scientific and technological open innovation under the new circumstances. At present, a new round of scientific and technological revolution and industrial transformation is evolving at a faster pace; innovation globalization is well under way; openness and cooperation remain the trend of the times. China’s scientific and technological innovation is increasingly inseparable from the world, and the world’s scientific and technological progress and innovative development is increasingly in need of China.

Foreign-invested R&D centers are an important part of China’s scientific and technological innovation system, and an important participant and driver in creating an open and globally-competitive innovation ecosystem. Since the 18th CPC National Congress, MOST, together with related departments, have conscientiously implemented the major decisions and plans of the CPC Central Committee and the State Council, fully implemented the innovation-driven development strategy, and actively supported the innovative development of foreign investment. A large number of foreign-invested R&D centers have grown rapidly, especially in the three international science and technology innovation hubs of Beijing, Shanghai and Guangdong-Hong Kong-Macao Greater Bay Area. They have contributed to an open and globally-competitive innovation ecosystem and to China’s scientific and technological innovation and high-quality development.

First, they have helped attract and gather high-end innovation elements. Foreign-invested R&D centers are important platforms for foreign-invested enterprises (FIEs) to attract and gather high-end talents at home and abroad. Here are some statistics. From 2012 to 2021, the full-time equivalent of R&D personnel in foreign-invested industrial enterprises above designated size in China rose from 595,000 person-years to 716,000 person-years, an increase of 20.4%. Meanwhile, the development of foreign-invested R&D centers drove the rapid growth of R&D investment of enterprises. From 2012 to 2021, the R&D investment of foreign-invested industrial enterprises above designated size increased from RMB176.36 billion to RMB337.74 billion, up 91.5%.

Second, they have played a leading role in promoting high-level innovation activities. Foreign-invested R&D centers have strong innovation capability in basic and frontier sectors. They have not only boosted the FIEs to deliver high-quality innovation results, but also encouraged innovators in China to step up the pace of R&D innovation, contributing to the scientific and technological innovation in China. From 2012 to 2021, the valid patent holdings of foreign-invested industrial enterprises above designated size increased from 68,000 to 241,000, up 255.2%.

Third, they have contributed to mutual learning and connection between innovation networks in and outside of China. Foreign-invested R&D centers are not only an effective channel for the FIEs to quickly enter China’s market and deeply participate in China’s R&D and innovation activities, but also an important interface for Chinese enterprises to integrate into the global innovation network. In recent years, China has accumulated a number of high-level foreign-invested R&D centers in information, biomedicine, new materials, new energy and other sectors. They have greatly promoted the innovative development of the FIEs and made China’s scientific and technological innovation system more open, facilitating China’s integration into the global industrial chains and innovation chains.

Going forward, we will fully implement the decisions of the 20th CPC National Congress and support the development of foreign-invested R&D centers with greater efforts and more solid measures. We will encourage and guide the creation of more foreign-invested R&D centers in pioneering regions of Beijing, Shanghai, the Guangdong-Hong Kong-Macau Greater Bay Area, Chengdu, Chongqing, Wuhan, Xi’an, etc., and work for foreign-invested R&D centers to better integrate into China’s scientific and technological innovation system. The centers will be enabled to play a bigger role in creating an open and globally-competitive innovation ecosystem, in building a new development pattern and in pursuing high-quality development, thus contributing more to global scientific and technological progress and innovative development. Thank you.

Economic Information Daily: From your introduction, I feel that the Measures are strong, targeted and cover a wide range of areas. The implementation of the policy will involve multiple departments and local governments. What are the considerations and arrangements for carrying out the policy and the related measures? How to ensure that they are well-implemented?

Chen Chunjiang: The Measures were jointly studied and formulated by 23 departments, and local governments put forward many good suggestions during the process. This proves that encouraging foreign-invested R&D centers has been widely recognized and supported. Formulating plans accounts for 10% of the work while the rest 90% lies with implementation. After the introduction of the policy, the most important thing is to implement it. The Measures include a clear division of tasks, and all local governments and departments will work together to effectively carry out every measure in a prudent and practical manner. In the next step, MOFCOM and MOST will take the lead in strengthening coordination and promoting the work of local governments and departments. Our considerations mainly focus on the following four aspects.

First, we will enhance policy communication. Today’s briefing is a specific action in this aspect. Friends from the press are welcome to report the Measures in an all-round manner and from different perspectives. In the next step, we will continue to organize related departments, local governments and industry associations to further promote the policies, expand channels and create new ways of communication, to make communication more targeted. We will also send publicity materials to FIEs and foreign chambers of commerce and associations one-on-one through the task force for key foreign-invested projects under the foreign trade and foreign investment coordination mechanism. This will help FIEs understand and leverage the policies.

Second, we will enhance coordination among departments. We will promote the departments involved in the Measures to formulate detailed and specific measures at an early date based on the division of work, so that the 16 policies can be put in place and come into effect as soon as possible. We will timely review and assess the implementation, identify and address shortcomings, and work together in addressing the difficulties and hindrance in the process to give better play to the Measures.

Third, we will improve supporting measures. You may have noticed that local people’s governments are responsible for implementing some of the measures. We will strengthen the guidance to local authorities of commerce and work with the authorities of science and technology to help local governments improve supporting measures, launch targeted supporting policies, and make sure that market participants are well-informed. Apart from that, we will timely summarize good experiences and innovative practices in local areas to make preparation for future policies to be introduced.

Fourth, we will enhance the provision of services. We will adhere to a problem-orientated approach, and give full play to the role of task force for key foreign-invested projects and competent commercial departments at all levels. The difficulties and problems reported by foreign-invested R&D centers will be timely coordinated and addressed, and the demands and concerns of enterprises will be responded in a timely manner. If the FIEs have any questions, they may report them to the task force for key foreign-invested projects and competent commercial departments at all levels. The task force will sort out the problems one by one and coordinate related parties to look into and address them. Thank you.

Shu Jueting: Next question.

China Business News: To implement the Measures, what specific support will MOST provide to encourage FIEs to invest in and set up R&D centers for scientific and technological innovation?

Wu Jiaxi: Let me brief you on what we are going to do. While we were formulating the document last year, we carried out in-depth research together with MOFCOM on supporting FIEs in their scientific and technological innovation, focused on salient issues and pressing needs, and put forward some specific initiatives. The Measures introduced this time lists “supporting scientific and technological innovation” as the first measure, which demonstrates that we highly value foreign investors’ high-standard R&D and innovation activities. Assistant Minister Chen just briefed on the contents of the document. To put the measures into practice, MOST will focus on the following aspects together with related ministries.

In terms of optimizing services for scientific and technological innovation, we will further streamline procedures and documents related to application and review, and organize training to facilitate understanding of related policies. In particular, we will provide better guidance for foreign-invested R&D centers that apply for the identification as new- and high-tech enterprises, and provide more efficient and targeted services for the establishment and operation of foreign-invested R&D centers.

In terms of encouraging basic research, we will support the use of large scientific apparatus, scientific and technological reports and related data in accordance with the law, which will provide foreign-invested R&D centers with strong underpinning for basic research and key, generic technology R&D.

In terms of facilitating coordinated innovation of industry, academia and research, we will encourage domestic higher-education institutes, research institutes and vocational schools to work closely with foreign-invested R&D centers in making technological research breakthroughs, building innovation and entrepreneurship platforms, as well as establishing postdoctoral research stations with a view to improving the level and standard of foreign-invested R&D centers’ engagement in coordinated innovation.

In terms of boosting open innovation, we will support the establishment of such R&D centers as open innovation platforms, provide better infrastructure and other conditions, and further consolidate innovation resources at the same time to improve the open innovation level of foreign-invested R&D centers.

In terms of providing better financial support for scientific and technological innovation, considering that foreign-invested R&D centers are highly knowledge- and technology-intensive, we will further optimize the “science plus finance” innovation model, and adopt refined, detailed policies and measures to provide more efficient, targeted funding support for the research and innovation of foreign-invested R&D centers.

In terms of facilitating participation in government projects, we will make national scientific and technological programs and projects more open, and encourage and support foreign-invested R&D centers in undertaking and engaging in more national scientific programs. We will incorporate experts from foreign-invested R&D centers into all types of scientific and technological expert pools to provide more convenient channels for foreign-invested R&D centers to participate in public scientific and technological projects.

At the same time, we will continue to foster an international research environment. In particular, we will encourage national new- and high-tech zones as well as national independent innovation demonstration zones to provide sound policy support and services regarding land, industry, talents, and a business-friendly and livable environment for greater development of foreign-invested R&D centers. Thank you.

CRI: We see that the statistics published in the morning show that in 2022, China’s foreign direct investment reached RMB1.2 trillion, up 6.3% year-on-year. What are the working arrangements for the FDI this year?

Chen Chunjiang: Let me take this question. The report to the 20th CPC National Congress set forth to promote high-standard opening-up. The Central Economic Work Conference calls for greater efforts to attract and utilize the FDI. MOFCOM will firmly implement the decisions of the 20th CPC National Congress and the plans of the Central Economic Work Conference and focus our work in 2023 on the following four areas to stabilize the stock, expand the growth and improve the quality of the FDI.

First, market access will be widened. We will work actively to reasonably reduce the negative list for foreign investment, further lower the access threshold, and step up the liberalization of modern services. The demonstrations and pilots of free trade zones, the free trade p ort and services liberalization will receive support, along with the trials and pilots of opening-up platforms, such as national economic and technological developments zones, to steadily expand institutional opening up.

Second, policy support will be strengthened. The 2022 Catalogue of Encouraged Industries for Foreign Investment will be well implemented and supporting measures improved to ensure the accessibility of preferential policies and channel the FDI into advanced manufacturing, modern services, and technology research and development as well as the central, western and northeastern regions of China. Special policies for manufacturing FDI attraction and foreign-invested R&D centers will be acted on with strengthened supervision, guidance and assessment to ensure the fruition of various policies.

Third, FDI attraction will be enhanced. We will guide the localities to organize investment promotion activities, draw upon bilateral investment promotion working mechanisms and overseas economic and commercial counselor’s offices and build communication and exchange platforms for multinationals and local FDI attraction agencies to facilitate local investment matchmaking. International cooperation on investment will be strengthened to firm up the investment of industrial champions and attract more investment from small and medium-sized cutting-edge companies for more diversified sources of investment and investors. The localities will be encouraged to organize regular events for going global and bringing in to fast-track the execution of key FDI projects, especially flagship projects.

Fourth, investment environment will be optimized. We will enforce the foreign investment law and ensure equal market access and a level playing field for foreign-invested enterprises. The complaint mechanism for the FIEs will be leveraged to strengthen intellectual property protection, protect the legitimate rights and interests of foreign investors and deliver on national treatment for the FIEs. The special task force for key foreign-invested projects will play a bigger role with regular communications to help the FIEs address all kinds of difficulties and problems in a timely manner through more targeted and effective services to bolster the confidence of foreign investors.

In the new year, we will do a even better job on the FDI and believe that more foreign investors will be bullish on and invest in China with greater success. Thank you.

Shu Jueting: Just now, the reporter mentioned China’s FDI in 2022. This morning, MOFCOM’s official website also published the details and features of FDI attraction in 2022. We welcome your interest.

If there are no further questions, I conclude today’s briefing. If there are any follow-up questions, please contact the Information Office of MOFCOM. Thank you to our two speakers and friends from the media. With the Spring Festival approaching, I wish you good health and prosperity in a very happy Chinese New Year.

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