China's Economy
R&D Investment
China invested RMB 3.782 trillion ($519 billion)
in technology R&D in 2022, up 10.1% YoY and the
seventh year of double-digit growth, according
to Chinese government data released on 20 September.
This accounted for 2.54% of Chinese GDP, 0.11%
more than in 2021. China is the world’s second
largest R&D investor after the US
Chinese enterprises are the biggest drivers of
R&D (77.6% of total input), matching that of US
enterprises (77.6% in 2022) and approaching Japan
(78.6%) and Korea (79.1%).
Government tax breaks and matching financial
incentives motivate enterprises to invest more in
R&D. Chinese analysts believe US-led technology
export restrictions will compel China to invest even
more in domestic R&D.
Foreign Investment
On 18 August China’s Ministry of Commerce
reported on FDI in China for the first seven
months of 2023:
- FDI was RMB 766.7 billion, down 4% YoY
(in US dollar terms, the drop was 9.8%).
- 28,406 new foreign-invested companies
were registered, up 34% YoY.
- FDI in the manufacturing sector increased
0.1%, high-tech 3.8%, and high-tech
manufacturing 25.3%.
- Investments jumped YoY from France
(213.7%), UK (159.9%), Canada (113.3%),
and Switzerland (61.2%)
China Internal
Foreign State Immunity Law
On 1 September the Standing Committee of the National People’s Congress (NPC) approved the Foreign State Immunity Law (FSIL), to go into effect on 1 January 2024. The law has 23 articles that cover six major areas and limit exemptions for foreign actors:
CHINA'S FOREIGN STATE IMMUNITY LAW PROVISIONS:
- Foreign state immunity: Chinese courts can exercise jurisdiction over non-sovereign actions by foreign sovereign states, such as their commercial activities and their faults for personal and asset damages.
- Asset seizure by Chinese courts: Assets of foreign sovereign states, such as diplomatic assets, are exempted from distraint by Chinese courts, but their commercial assets are NOT exempt under certain conditions.
- Definition of foreign sovereign states: A foreign sovereign state includes the state itself, its government organizations, and individuals and entities that exercise sovereign actions on behalf of the foreign state.
- Role of China's Ministry of Foreign Affairs in FSIL cases: MFA should provide courts with necessary documents to handle FSIL cases and recommendations on cases and issues related to China's key national interests and diplomacy, giving MFA substantial sway in FSIL cases.
- Principle of reciprocity: China offers reciprocity to countries that give China similar immunities.
- Legal process for FSIL cases.
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