China-US trade war: New Chinese law seeks to address concerns

China-US trade war: New Chinese law seeks to address concerns

The article reflects the author's opinion, and not necessarily the views of CGTN.

China's national legislature on Friday passed the foreign investment law, a landmark legislation that will provide stronger protection and a better business environment for overseas investors.

"The newly signed Foreign Investment Law in China dramatically increases scope for foreign investors" Chinese M&A and investment strategies.

The law was created and passed within 3 months, in what's being seen as a rare, swift response from China.

China can use reserve requirements and interest rates to support economic growth, Premier Li Keqiang said, promising broad policy steps to prevent a sharper deceleration as the world's second-biggest economy expands at the slowest pace in almost three decades.

Over the past 40 years of reform and opening-up, profound changes have taken place in both the domestic and worldwide landscape.

Tim Stratford, chairman of the American Chamber of Commerce in China, was quoted by AFP as saying that the changes "only address a small slice of the overall set of concerns our members have about the uneven playing field foreign companies encounter in China".

China's actual use of foreign capital had ranked the first among that of all developing countries for 27 consecutive years and now, it ranks the second in the world.

It aimed at promoting high-quality economic development. In the age of further reform and opening up, the "three foreign capital laws" formulated in the early days can no longer meet the needs of developing a new economic system with an open market.

The passing of the new foreign investment law came after Trump's administration tried to cool down the talk about the imminent trade deal. Industries that are not on the list will be fully open, with domestic and foreign firms enjoying the same treatment.

These measures have brought tangible benefits to foreign investors and have subsequently been replicated nationwide.

"The new law promises more security for foreign companies investing in China", Ohoven said, while urging German companies to take advantage of the new opportunities for cooperating with Chinese partners.

The bill will eliminate the requirement for foreign enterprises to transfer proprietary technology to Chinese joint-venture partners and protect against "illegal government interference" - major sticking points in the trade negotiations.

While 2,929 delegates voted in favor of the law, eight voted against and eight abstained. "While not all of our concerns were addressed in this law, it is time to move forward". CNBC reported that American Chamber of Commerce policy chair Lester Ross said, "It's not giving this adequate time for public comment from AmCham (and foreign businesses)".

"This is not in accordance with Chinese law, and is not how China does things". Such a principle is also reflected in other aspects such as standard setting, government procurement, financing, land use, bidding and oversight.

Beijing uses negative lists to identify areas that are either off-limits to non-state businesses or that require them to go through an application and approval process.

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