In pursuit of technological self-sufficiency, China promises to open its market to foreign investors.

Reuters China pledged on Tuesday to develop sectors it considers crucial for future competitiveness, from artificial intelligence to space, while also offering to liberalize access to manufacturing and some service sectors to stem the exodus of foreign investors.

The commitments, published during the annual meeting of Parliament, conveyed a clear message: China is open for business, provided it fits within a national agenda now defined by a pursuit of self-sufficiency.

They emerge at a time when foreign investor sentiment has deteriorated due to a weaker-than-expected economic recovery following Covid-19 and investigations against companies, while technological innovation and self-sufficiency efforts have increased trade tensions with the West.

"Announcements don't move markets and promises don't drive investment," said Sean Stein, president of the Beijing-based North American Chamber of Commerce in China, adding that the announcement of the reforms was encouraging.

"The key, as always, will be full and timely implementation."

Although President Xi Jinping set a goal of opening up access for foreign investment to the manufacturing sector at the Belt and Road Forum last October, this has done little to boost investor confidence.

The powerful state planning body, the National Development and Reform Commission, also said on Tuesday that it intends to ease market access restrictions in service sectors such as telecommunications and medical services, but did not elaborate.

In 2022, China reduced the number of sectors on its "blacklist," which are restricted or prohibited from accessing the market, to 117, down from 123 in 2020.

In China's automotive sector, electric vehicle manufacturers like Tesla have been allowed to create wholly owned entities, with foreign companies such as BMW and Volkswagen permitted to take majority control of their joint ventures.

But changes in economic conditions have triggered a broad withdrawal of foreign investors from China's manufacturing sector, while foreign direct investment declined for the first time in more than a decade in 2023.

Last year, South Korea's Hyundai Motor sold a joint venture factory in Chongqing as part of a reshaping of its strategy for China.

On Monday, Western Digital Corporation sold an 80% stake in a flash memory factory in Shanghai to Chinese chip assembly and testing company JCET Group.

"Foreign investors will face stiff competition from their Chinese counterparts, so their investment decisions will not be determined by what the government says, but by the return they receive and their overall strategy," said Dan Wang, chief economist at Hang Seng Bank China.

TRUST - Premier Li Qiang reaffirmed a goal set out last year by his predecessor, Li Keqiang, to increase self-reliance and the strength of science and technology, an initiative that intensified friction between China and the West last year and which, by all indications, will continue to do so.

China has increasingly emphasized the government's role in directing resources toward achieving its goals.

Since last year, the Communist Party has taken on a more prominent role in defining technology-related policies, following a major overhaul of that ministry as part of a broader restructuring announced in 2023.

So far, their efforts have made some progress, for example, with the launch last August of a surprising new smartphone from Huawei, the Chinese technology giant, which, according to analysts, was powered by an advanced chip developed independently in China.

Li cited quantum computing and life sciences as areas that China wishes to open up, while also pledging to intensify efforts in "big data," commercial spaceflight, and artificial intelligence, as well as launching science and technology programs to achieve strategic and industrial development goals.