IT & Internet Image

China – Internet, Policies to attract Expats, and Investments

Shelley Warner, Reloc8 Asia Pacific Group’s China partner, shares updates on Internet access via VPNs, Shanghai ’s wish to attract more international professionals, and news on China becoming the world’s top investment magnet in 2014.

The Chinese Great Firewall gets higher

Efficient and easy telecommunication is a major concern for expatriates in China and while the Great Firewall of China has been an impediment, many foreign individuals and companies use VPNs to get around or over it. Recent weeks have, however, witnessed effective efforts by the Chinese government to make the Great Firewall of China stronger and higher and VPN providers have found it increasingly difficult to keep their communication gates open. Not only have the usual Facebook and Twitter accounts been blocked, but many general information sites and news publications have become more and more difficult to access, affecting individual and corporate efficiency.

Beyond the control of any VPN, according to a Washington Post report, are Chinese demands on foreign IT firms wanting to participate in the Chinese market to provide access to the encryption algorithms and data traffic managed by the firms. Thus the service provider companies are themselves facilitating the effectiveness of the Great Firewall.

Apple, which in January reported its biggest profits in its history, in large part due to the ales of the iPhone 6 in China, also reported that it is storing iCloud data in Chinese servers that are constantly monitored for the government. Yahoo and LinkedIn have been cooperating for even longer.

Flexible policies to attract foreign expats

The Shanghai Government is keen to attract more international professionals to Shanghai, to foster its drive to become a city of innovation and turning it in a technological metropolis.

While details are still vague, the Shanghai Government has indicated that it will introduce new policies providing preferential support to the professional expatriates and in terms of social security, medical assistance and children’s education. This is to move them towards their objective of changing the face of China from the well known “MADE IN CHINA” to a more profitable and sophisticated “DESIGNED IN CHINA”.

China becomes the world’s top investment magnet in 2014

While the US has been traditionally been the most attractive market for foreigner direct investment (FDI), the global panorama is changing and in 2014 China overtook the United States and attracted a reported $128 billion FDI against the United States $86 billion.

Services is the sector with the highest FDI, replacing manufacturing as the main recipient of foreign capital. Similarly, investment in labour intensive industries has been declining while the high tech sector is growing.

In order to attract more global cashflow to China, a new draft foreign investment law is in circulation. More flexible and more liberal the new law aims to attract even more capital to China. Future years are expected to see an increase in foreign start ups and the strengthening of sectors other than labor intensive manufacturing.