By Li Weihong and Yang Xun from People’s Daily
China’s newly-drafted foreign investment law will lay a solid legal foundation for China to provide a better business environment for foreign investment, and to move towards a new pattern of all-round opening up, a Chinese expert said in an interview with People’s Daily.
The law, which is undergoing review by national legislators at the ongoing session of the 13th National People’s Congress (NPC), is expected to be put up for a vote on March 15. The NPC Constitution and Law Committee held a plenary session on March 11 to review the collected suggestions on the draft from the deputies.
If adopted, the new law will replace three existing statutes on Chinese-foreign equity joint ventures, non-equity joint ventures and wholly foreign-owned enterprises to serve as China’s basic law on foreign investment.
Giving a priority to protect and promote foreign investment, the draft upgrades all of China’s reforming measures over foreign investment since 2013, especially those related to the system of national treatment plus a negative list, to law provisions, said Kong Qingjiang, a drafter of the new law.
The new law can also offer legal guarantee for the outcomes from a new round of reforms and opening-up, added Kong, a law professor from China University of Political Science and Law.
As a fundamental law on investment and foreign capital, the new draft has included the content on how to protect, promote and manage foreign investment, the professor pointed out.
By putting absorbing and protection of investment on its top agenda, the law meets the requirements in transforming government’s role, and deepening reforms that delegate power, improve regulation, and upgrade services, he said, adding that it is helpful in creating a favorable business environment.
The draft also prioritizes the rights of investors, but shrinks that of governmental departments. The 22th, 23th and 24th articles of the draft stipulate that administrative organs and their staff are not allowed to force the investors to transfer their technologies with administrative means.
Governmental departments at various levels are asked to formulate guidelines and regulations on foreign investment based on law provisions and rules, and prohibited to damage the legitimate rights and interests, or add obligations of foreign investors without providing legal credentials.
They are also banned to set preconditions of market entry and exit, or interfere in the legal business operation of the investors without backup of laws and administrative rules.
All of these requirements for governmental departments stand for China’s efforts in rule of law, Kong pointed out.
