China's sweeping national security law sparks uncertainty for foreign firms
German envoy warns of legal uncertainty and hurdles to investment
The mainland's sweeping national security law and a series of related laws in the making have created legal uncertainty for foreign companies and new hurdles for their investment, said Michael Clauss, the German ambassador to China.
The European Union delegation to China sought clarification over the definition of national security and suggested specific changes in five pages of feedback on the draft of the new national security legislation during its public consultation.
"But none of [the changes] has been taken up," Clauss said in an interview with the South China Morning Post.
His remarks came after the National People's Congress passed a sweeping and controversial national security law on July 1 that defined any threat to the state's power, sovereignty, or the sustainable growth of the economy as a threat to national security.
The new law said that China would introduce a vetting scheme to scrutinise any foreign investment that posed a risk to national security.
Beijing is also deliberating at least three other related, but more detailed, laws on foreign investment, cyber security, and foreign NGOs.
Foreign companies feared the laws might be used to keep certain overseas competitors to Chinese companies out of the market because the definition of national security was so broad and vague that any business activity could be subject to it, Clauss said.