A day before China’s Foreign Investment Law came into effect on January 1, the authorities released a guidance “ Implementing Regulations ” to clarify compliance for both local governments and foreign-invested enterprises, which are allowed a five-year transitional period. However, this has failed to fully address the concerns of foreign investors and in some cases, has dismissed their concerns entirely. The draft of the Implementing Regulations was released for public comment last November, with foreign investors offered just one month to provide input. The US-China Business Council , which represents more than 200 United States companies with significant presence in China, aggregated comments from a wide swathe of industries last year, providing a detailed compilation of where member companies saw the law falling short. With the release of the November draft of the Implementing Regulations, the council provided an updated assessment , highlighting areas that lack clarity or would benefit from additional transparency. However, the final version of the Implementing Regulations was released on December 31 in a manner that mirrors the rushed process in which the Foreign Investment Law was passed at the annual meeting of the National People’s Congress last March, suggesting that China has no intention of substantively responding to the concerns of prominent foreign investors or foreign-invested entities. First, Article 2 of the Foreign Investment Law defines as “new projects” any foreign investment carried out individually or jointly with other investors. While the draft version of the Implementing Regulations attempted to clarify the specifics of what constitutes “new projects”, the final version has omitted this. This makes it unclear how the new law applies to investments carried out other than through the establishment of foreign-invested enterprises or through mergers and acquisitions. Second, the draft version of the Implementing Regulations noted that China would apply its Foreign Investment Law in accordance with all international treaties and agreements. But the final version removes any reference to such agreements. While one would not expect the Chinese government to bind itself to following international laws over its own, choosing to remove all mention of international agreements is, at best, obfuscating, and at worst, a signal that China does not intend to uphold or conclude international agreements that require specific actions in the field of foreign investments. A bilateral investment treaty with the US is one such agreement that could be a positive step for China’s foreign investment regime. Article 4 of the Foreign Investment Law does note that more favourable provisions in international treaties or agreements may be applied, but this is not a sound basis for certainty. Finally, there is a glaring lack of clarity on the national security review mechanism. Little has been discussed regarding the transfer of reviewing authority from the Ministry of Commerce to the National Development and Reform Commission (NDRC). I noted last May that the transfer of this responsibility to the NDRC could have ramifications for the ways in which security reviews are conducted, as the state planner is traditionally more concerned with China’s development priorities and economic security than the investment and trade-focused Ministry of Commerce. The removal of any definition of what constitutes “new projects” and who might be responsible for overseeing them further muddles these competing lines of authority. Aside from these problems with the Implementing Regulations, the Foreign Investment Law will do little to open up sectors that are closed to foreign investment, as stipulated in the negative list system. Foreigners remain limited or barred from investing in key industries such as the internet and information technology services. Such sensitive sectors are likely to remain closed or restricted in the near term, despite the announcement last week by the Ministry of Commerce that the negative list will be trimmed to open up more sectors to foreign investment. So long as China maintains the negative list system, the allegedly fair “national treatment” afforded by the Foreign Investment Law will do little to change the reality for foreign investors seeking to tap into sectors with strong growth potential. China’s foreign investment reform won’t narrow differences with the US Some additions to the Implementing Regulations, however, are worth noting. Article 21 explicitly allows foreign investors to take legal action if they are dissatisfied with expropriation – though what specific remedies are available remain unclear. Article 24 maintains the language noting that technology transfers cannot be forced through administrative coercion, adding at the end of a list of examples, “and any other administrative measure”, seemingly expanding the scope of the prohibition. At the very least, the government is aware that it must pay lip service to some concerns expressed by long-standing players in the Chinese market. Ultimately, the updated Implementing Regulations do little to address the uncertainty wrought by the vague provisions of the Foreign Investment Law. The lack of progress on this front represents a missed opportunity for the administration of US President Donald Trump, which initially pressed for Chinese official commitments to such “ structural reforms ”. Trump’s overwhelming focus on the trade deficit at the expense of more significant barriers to market access have enabled Chinese officials to balk at more fundamental concessions that might have been addressed in these regulations. Trade volumes ebb and flow, but bilateral investment – or lack thereof – has greater ramifications for long-term economic interdependence. Austin Lowe is a Washington, DC-based analyst and global law scholar at Georgetown Law