Chinese legislature approves possible olive branch to US

China-US trade war: New Chinese law seeks to address concerns

China-US trade war: New Chinese law seeks to address concerns

After almost four years of discussion and revision, the Foreign Investment Law, a legal basis for the utilization of foreign capital in China in the new era, was finally passed at the second session of the 13th National People's Congress on the March 15.

The state must protect "copyrights", and ensure that foreign companies "at a disadvantage", but on an equal footing can have a part in the competition, it said in a previously published explanation of the legal text.

The legislation aims to address long-running grievances from foreign firms including stronger protections for intellectual property, but the USA and European chambers of commerce voiced concerns that they were not given enough time to give their input.

Delegates at the NPC passed the foreign investment law with 2,929 in favour, eight against and eight abstentions.The law will come into effect on 1 January 2020.

A draft was presented to the parliament last week but the latest revisions have not been made public since then. With unified provisions for the entry, promotion, protection, and management of foreign investment, it is a new and fundamental law for foreign investment in China.

The state will manage foreign investment according to the system of pre-establishment national treatment plus a negative list, the law stipulates.

"Enforcement will be the key metric for evaluating success, but the business community has collectively advocated for years for the Chinese government to impose criminal penalties for infringement, we need to recognise this positive progress to that end".

Foreign companies in China also often complain that state-owned Chinese firms benefit from unfair advantages, such as government subsidies and preferential treatment.

Washington also wants China to roll back plans for government-led creation of global competitors in robotics and other technologies.

"China's protection of domestic industry is a long-running concern for foreign business", said Diana Choyleva, chief economist at research firm Enodo Economics.

"The vague language leaves much room for interpretation and makes compliance hard", he added.

"We were not allowed to interview Communist Party and government officials at all this year", one of the journalists said.

Data on Thursday showed that China's survey-based jobless rate rose to 5.3 per cent in February, from 4.9 per cent in December, partly due to job shedding by export-oriented companies.

"[The changes] do not address a number of the persistent concerns of foreign companies or foreign-invested enterprises in China", it said in its statement.

But it added that it was concerned that "such an important and potentially far-reaching piece of legislation will be enacted without extensive consultation and input from industry stakeholders".

The speed at which this process was concluded is clearly a response to Beijing's ongoing trade dispute with Washington, Katja Drinhausen, a researcher at the Berlin-based Mercator Institute for China Studies, told DW.

"In actual practice, our goal is to generate the same amount of job opportunities as we did a year ago, which is over 13 million", Premier Li Keqiang told a press conference after the conclusion of the annual session of China's national legislature Friday. "I believe that this is also the expectation of the world", Li said.