THE Chinese parliament is to deliberate the nation's first company law at a meeting next week during which deputies will decide if major amendments to the draft legislation are necessary. The Legislative Affairs Committee of the National People's Congress standing committee took the initiative to draft the company law last September, although the executive branch, the State Council, had earlier produced its own draft. The first draft of the NPC-initiated company law was submitted to the congress standing committee for discussion in February and an extensive consultation exercise was undertaken with central and local authorities. Legislative Affairs Commission vice-chairman Bian Yaowu said that during the meeting next week, the NPC standing committee would hear reports from the Legislative Affairs Committee on the results of consultation over the past months. He said the law would cover such areas as company structure, company activities, conditions for setting up companies, accounting and financial systems, and takeovers and mergers. Although Mr Bian would not give a date for the enactment of the company law, he stressed that the NPC had attached great importance to the drafting of economic legislation and the company law drafting would be given priority. It is believed that if the NPC standing committee does not ask for major amendments to the first draft during its meeting next week, the legislation could be passed some time this year. Mr Bian said a company law was necessary as there were already 480,000 registered companies at the end of last year. The total at present could be as high as 600,000 if new registrations and foreign funded companies were taken into account. Noting that Shenzhen had already published its company regulations, which are the equivalent of local company law, Mr Bian said the NPC would absorb the experience of its implementation. He said the publication of a national company law was not only important for the improvement of the performance of enterprises, but would also have a positive impact on the development of China's securities law. Although the experience of overseas jurisdictions would be borrowed when drafting the company law, Mr Bian said the company law would retain some Chinese characteristics. He said the significant proportion of state owned enterprises in the national economy would require some special treatment as they became shareholding companies. In a bid to liberalise the economic law-making system more quickly, the NPC has adopted a specialisation system instituted by the new standing committee of the congress. The NPC has called on talents from various sectors around the country and organised special task forces to draft laws, especially economic ones. The idea is to speed up the legislative process considered to be very slow by overseas legal experts. Although the Beijing authorities had promised laws for many areas of business activity, they were insufficient to guarantee equality in the market place, China analysts said. China is also very keen to comply with international norms which will also facilitate the country's entry into the General Agreement on Tariffs and Trade (GATT). Two months ago, the State Council approved the interim regulations on the Administration of the Issue and Trading of shares which are regarded as the blueprint of China's first securities law. The rules, which have yet to be passed by the NPC before becoming law, encompass the issue and trading of shares, takeovers, custodian and clearing procedures, disclosure, investigation and arbitration.