Speaking at the National People's Congress, Chinese Premier Li Keqiang released the country's annual work report and said that the central committee will crack down on state-owned enterprises.
Li also said that the government intends to give incentives to foreign investors which have businesses in areas not directly controlled by the central government. He also committed to pay more attention to investors' needs.
Upon presentation of the report, Li said, "Local governments can, within the scope of the powers granted by law, adopt preferential policies to attract foreign investment."
He added, "China's door is going to keep on opening wider, and China will keep working to be the most attractive destination for foreign investment."
Li also said that the government will cut steel production by 50 million tons of steel and 150 million tons of coal, which will be on top of the reductions done last year.
The reduction will result in job cuts as much as 1.8 million but the government only cut 726,000 jobs due to pressure from labor unions of the Communist Party.
Beijing anticipates the many laidoff workers will take action to the streets. The foreign investments are intended to absorb the labor surplus.
"This year, to reduce excess capacity, we need to make accommodation for 500,000 workers," Chinese Labor Minister Yin Weimin.
Analysts think that the recommitment to foreign companies is done so that the central government can focus on growing the Chinese economy.
Paul Gillis, co-director of the IMBA program at the Guanghua School of Management, said, "What we are seeing now is a recommitment to foreign investments. Both foreign and private Chinese capital will be given a greater role in the Chinese economy."
"I think this gives the green light to local governments to try special incentives, such as those in the Shanghai Free Trade Zone, to attract foreign companies," he added.