By Sun Fei & Wu Zhenyu, Research Institute of Finance, DRC

Research Report, No.113, 2021 (Total 6178) 2021-5-10

Abstract: Affected by trade and investment protectionism and COVID-19 pandemic, about 55 countries and regions, except China, adjusted the investment policies 98 times on different occasions in 2020, in which adjustments of restrictive investment policies accounted for 42 percent of the total, hitting an all-time high since 2003. The trends of global investment policy adjustment have become divergent, as developed countries mainly launched restrictive policies while developing countries adopted incentive policies including tax breaks, improving the business environment and lifting restrictions on the proportion of foreign investment in certain industries. For countries with significantly increasing restrictive policies, Chinese enterprises need to make full market research in a meticulous manner before making investment, mergers and acquisitions and use financial tools such as overseas investment insurance and medium- and long-term export credit insurance to reduce risks induced by relevant policies. For developing countries with incentive policies for improving the investment environment, China needs to take advantage of their policy adjustment period to optimize its global industrial and supply chains and build the development pattern to promote interplay between domestic circulation and global circulation.

Keywords: adjustment of investment policies, the security review of foreign investments, export credit insurance