China welcoming more foreign investments

BEIJING — The Standing Committee of the National People’s Congress (NPC) on Tuesday started reviewing a new draft of the foreign investment law, the latest move to promote the country’s opening-up initiative.

During the two-day session, members of the top legislature are scheduled to deliberate the new version of the draft law, which has been updated from the first draft submitted to the previous session last month.

Once adopted, the unified law will replace three existing laws on Chinese-foreign equity joint ventures, non-equity joint ventures (or contractual joint ventures) and wholly foreign-owned enterprises.

By the end of October 2018, a total of nearly 950,000 foreign-funded companies had registered in China, bringing in an accumulated investment of over 2.1 trillion US dollars and performing as major driving forces in China’s economic and social development.

By explicitly formulating rules on transparency, government procurement and capital market, the new draft law has complemented the legal system concerning foreign affairs and responded to overseas concerns, said Li Yuefeng, a member of the NPC Standing Committee, during panel discussions.

To better implement the report of the 19th National Congress of the Communist Party of China (CPC) in 2017, the new draft further expanded the article on the system of pre-establishment national treatment plus a negative list, said Li Fei, chairman of the NPC Constitution and Law Committee, while presenting the new draft to lawmakers.

The CPC report noted that “China will not close its door to the world; we will only become more and more open.” The draft is also in line with the amendment to the Constitution, which, adopted by the NPC in March 2018, stipulates that China “pursues a mutually beneficial strategy of opening up.”

It also stipulates that foreign-invested enterprises have equal access to favorable policies for enterprises.

Yuan Xiaohua, vice general manager of Guangqi Honda, an automobile manufacturing joint venture between Japan’s Honda Motor and China’s GAC Group, said the draft will remove differing treatments foreign investment companies, Chinese enterprises and joint ventures previously faced.

“The new law will help foreign investment companies and joint ventures enjoy more local preferential policies,” said Yuan.