China’s rushed foreign investment law gains lukewarm response from local and international businesses
- Draft legislation, set to be debated at the National People’s Congress, covers items on the wish list of US President Donald Trump to end the US-China trade war
- Slimmed down version of law first drafted in 2015 raises concerns that enforcement and implementation have been sacrificed
China’s draft foreign investment law is expected to be one of the flagship announcements at the ongoing National People’s Congress in Beijing, but it has received a lukewarm response from businesses and academics in China.
Among the foreign business community in China, there is a shared view that the draft foreign investment law (FIL) lacks substance and that it is being rushed through in a bid to meet some of the terms of a trade war truce laid out by US President Donald Trump.
“We are concerned that the drafting of the FIL is being squeezed between the normal legislative process and the negotiation table with the US, in part to address the trade conflict,” said Mats Harborn, president of the European Union Chamber of Commerce in China, who called for a more considered and consultative drafting of the law.
The FIL is moving through China’s legislative process at unprecedented speed and sets out to offer more protection to foreign businesses in China.
It covers many of the items on Trump’s reform wish list, including forced technology transfer, intellectual property protections and the safeguarding of foreign companies’ capital.
The draft law seeks to “further expand the scope of opening-up, to actively promote foreign investment, to protect the lawful rights and interests of foreign investment”.