​China adopts foreign investment law

The second session of the 13th National People's Congress (NPC) holds its closing meeting at the Great Hall of the People in Beijing, capital of China, March 15, 2019. [Photo: Xinhua]

China's national legislature has passed the country's new foreign investment law at the closing meeting of its annual session.

The landmark legislation will provide stronger protection and a better business environment for overseas investors.

With unified provisions for the entry, protection, and management of foreign investment, the new law aims to improve the transparency of China's foreign investment policies and ensure foreign-invested enterprises participate in market competition on an equal basis with domestic firms.

Top legislator Li Zhanshu suggests the legislation demonstrated the country's resolve to further open up.

"It is a basic law that helps push the country to a higher-level of opening up. We should carefully study and resolutely implement the law, so as to achieve high-quality economic development by promoting high-level foreign investment. "

The new law replaces three previous ones over joint ventures with foreign equity, wholly foreign-owned enterprises and contractual joint ventures with foreign investment.

Law maker Huang Yushan explains why he voted in favor of the new law.

"Previously, we had the three foreign investment laws. Yet as the country opens wider to the outside world, we need to formulate a unified foreign investment law. The new law will create a more stable, transparent, and fair competition environment for foreign investment, and will become a strong legal guarantee for China to achieve a higher level of opening up and promote foreign investment in the new era. So I voted for the new law."

The new law promises pre-establishment national treatment to foreign companies, allowing them to be treated the same as their Chinese counterparts in areas outside of the country's negative list.

It also vows to well protect intellectual property rights and faciliate foreign-invested enterprises' participation in standard-setting and government procurement.

According to the law, a mechanism will be established to effectively resolve complaints from foreign investors.

Bernard Dewit of the Belgian-Chinese Chamber of Commerce believes the law will boost the appeal of China's market for foreign investors.

"I think the new law can reassure the West about the will of Chinese government to keep the borders open, to keep welcoming for foreign investors. China will make it easier for foreign capital to flow into China and to invest in China is important because foreign investors, first of all want to be reassured that they are protected in their right. I think the new law would be also a good point on that."

The new law will come into effect on January 1 next year.