China’s National People’s Congress (NPC) has passed a landmark foreign investment law to provide stronger protection, ease restrictions and open Chinese markets to foreign investors.
The country’s top legislative council adopted the law on Friday at the end of the second session of the 13th NPC gathering at Beijing’s Great Hall of the People from March 3.
The law, which will be effective in January next year, also seeks to boost transparency of foreign investment policies and ensure that foreign-invested enterprises participate in market competition on an equal basis with their Chinese counterparts.
Addressing dignitaries that included Chinese President Xi Jingping and scores of foreign diplomats, Chinese Premier Li Keqiang said the regulation came about as Beijing focuses on stimulating over its 100 million market entities to spar both local and international growth.
“China will also continue to cut taxes and fees and level the playing field for all market players to achieve high quality development,” he said.
Statistics by the United Nations Conference on Trade and Development (Unctad) show that by the end of 2018, over 950 000 foreign-invested enterprises had been set up in China, with the accumulated foreign direct investment (FDI) exceeding $2.1 trillion.
According to the UN trade agency, FDI into China further ranks high among developing countries for 27 consecutive years.
Among others, the new foreign investment law also stipulates that the Chinese government shall protect the intellectual property rights of foreign investors and foreign-invested enterprises.
The new law will replace the previous laws on Chinese-foreign equity joint ventures, wholly foreign-owned enterprises and Chinese-foreign contractual joint ventures passed in 1979 and the 1980s.
Reacting to Beijing’s move, Adam Dunnett, secretary general of the European Union (EU) Chamber of Commerce in China told journalists that the new law will give more people confidence in China.