China's investment law to protect foreign investors, expand opening-up: NPC official

Chen Xiwen (C), chairman of Agriculture and Rural Affairs Committee of the National People's Congress (NPC), Uzhitu (2nd R), vice chairman of Financial and Economic Affairs Committee of the NPC, Liu Junchen (2nd L) and Xu Anbiao (1st L), both vice chairman of Legislative Affairs Commission of the NPC Standing Committee, and Cheng Lifeng, member of the Natural Resource and Environmental Protection Committee of the NPC, attend a press conference on the legislative work of the NPC for the second session of the 13th NPC in Beijing, capital of China, March 9, 2019.[Photo:Xinhua]

The latest draft of a proposed foreign investment law is being considered by the country's legislators during the ongoing Two Sessions meetings. The new law is designed to enhanced protection for foreign investors and aims to promote a further opening of China's economy.

A new draft foreign investment law has been submitted to the nation's lawmakers for deliberation.

If adopted, it will replace three existing laws on foreign equity joint ventures, wholly foreign-owned enterprises, and cross-border contractual joint ventures.

Liu Junchen, one of China's senior legislators, has described the law as being significant for the country and for its overseas investors.

"To meet the need to build an open economy in the new era, it is imperative to enact a new unified basic law on foreign investment. It is also essential to furthering opening-up, implementing the decisions and plans of the Central Committee of the Communist Party of China, building a new foreign capital management system, and unifying regulations on domestic and foreign investments."

Liu says that the law aims to improve the transparency of foreign investment policies and ensure domestic and foreign enterprises can compete on a level playing field.

"Promotion and protection are the highlights of the new foreign investment law. It is a law to promote and protect foreign investment, and vigorous expand opening-up and the promotion of foreign investment."

Zhang Yichen, a political advisor with the Chinese People's Political Consultative Conference and the chairman and CEO of CITIC Capital, has thrown his support behind the draft law. He says that the protection it provides to intellectual property rights will help the country to abide by international rules.

"The current amendment to (the draft of) the investment law is a very good step in showing the world that China is just as eager to protect intellectual properties and China will forbid forced technology transfer to address again, concerns from outside. I think in terms of market access, we could do better in some ways."

China is home to more than 2,000 regional headquarters and research and development centers for multinational enterprises.

A report by the World Bank Group said in 2018, China advanced to a global ranking of 46 in terms of ease of doing business, up from the 78th spot in the rankings in 2017.

Some global investors have said that the rollout of the new investment law will further boost global confidence in China's economy and promote high-quality development.