ZCZC
BCN-12
CHINA-TRADE-INVESTMENTS
China vows ‘fundamental change’ for foreign investors
BEIJING, March 4, 2019 (BSS/AFP) – China’s legislature will vote next week
on a highly-anticipated bill that will bring “a fundamental change” for
foreign investors, an official said Monday, in a move that could help ease US
trade tensions.
The draft foreign investment law will be the most closely watched item at
the annual two-week session of the rubber-stamp National People’s Congress,
which opens on Tuesday.
The legislation seeks to address longstanding complaints from foreign
companies, though Europeans voiced concerns that it was being fast-tracked to
meet US demands on trade.
The bill will eliminate the requirement for foreign firms to transfer
proprietary technology to Chinese joint-venture partners — a central issue
in China’s trade negotiations with the United States.
It also promises to abolish the “case-by-case approvals” process for
foreign investments, NPC spokesman Zhang Yesui said at a news conference.
The change will ensure that foreign investors will enjoy the same
privileges as Chinese companies in most sectors, except those placed on a
“negative list”.
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.
“Areas for prohibiting and restricting foreign investments shall be
clearly listed and areas outside the negative list will be fully open,” Zhang
said.
“Chinese and foreign investment will enjoy the same treatment.”
The new “unified law” will replace three existing laws on Chinese and
foreign equity joint ventures, non-equity joint ventures and wholly foreign-
owned enterprises.
“This is a fundamental change in our foreign investment management
system, which will improve the openness, transparency and predictability of
the investment environment,” Zhang said.
US and EU officials have long complained of a lack of fair access for
foreign companies in China, as well as rampant theft of intellectual
property.
Tim Stratford, chairman of the American Chamber of Commerce in China, said
last week “our initial impression is positive” but that businesses were
waiting for further detail.
But the European Chamber of Commerce in China said it fears the
legislation is being fast-tracked to meet US demands.
But the European Chamber of Commerce said it fears the legislation is
being fast-tracked to meet US demands.
The NPC will vote on the draft law on March 15, the last day of its annual
session.
BSS/AFP/HR/1335