Bloomberg Businessweek - USA (2019-05-27)

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An Institutionalized

Guarantee

New legislation allaysconcerns,createsclimateforgreaterforeigninvestor

confidence By Nie Pingxiang

China’sfirstForeignInvestment
Law,adoptedbythecountry’stop
legislatureinMarch,aimstopro-
mote, protectandmanageforeign
investmentintoday’seconomic
circumstances.Thenewlaw,whichwill
take effectonJan.1,2020,isexpected
to enhance the confidence of foreign-
funded enterprises in China.

A level playing field
The law eliminates case-by-case ap-
proval and makes fundamental changes
to foreign investment management.It is
poised to promote China’s openingupby
establishing a legal guarantee foritsopen
economic system.

It states that foreign investment shallbe
managed according to pre-establishment
national treatment plus a negativelist
of restrictions on foreign investment.
Government policies supporting enterprise
development will apply equally toforeign
investments, and they will be on parwith
domestic enterprises regarding govern-
ment procurement.

The law cracks down on extra-legalcurbs
on foreign investment, and governments
and relevant departments at all levelsare
required to formulate foreign investment-
related regulatory documents in
accordance with laws and regulations.The

openandtransparentinvestmentenviron-

ment.

A phasedapproach

China’scurrentlegalsystemtomanage

foreigninvestment—consistingofthe

LawonChinese-ForeignEquityJoint

Ventures,theLawonChinese-Foreign

ContractualJointVenturesandtheLaw

onWhollyForeign-OwnedEnterprises—

wasputinplaceintheinitialphaseof

reformandopeningup,whichbeganin

The author isa

researcher withthe

Chinese Academy

of International

Trade and Economic

Cooperation.ĝ

lawalsocontainsprovisionsstatingthat

theauthoritiesmaynotimpedeforeign-

investedenterprises’lawfulrightsor

imposeunlawfulobligations,andshallnot

setmarketentryandexitconditionsorin-

terferewithor influenceforeign-invested

enterprises’normalbusinessactivitiesin

violationoflaws.

Inaddition,thelawstressesimprovingin-

vestment-relatedservicesandsimplifying

managementprocedures,demonstrating

thegovernment’scommitmenttoa fair

andequitablemarketmechanismandan

Sarai Nietvelt, a doctor from Belgium, interacts with a nurse in a foreign-funded hospital in Shanghai in

October 2018.

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