China proposes full liberalisation of foreign investment access

HONG KONG – China’s Ministry of Commerce (MOFCOM) has released a draft paper proposing that the existing Sino-Foreign Equity Joint Venture Law, Foreign Capital Enterprise Law, and Sino-Foreign Cooperative Joint Venture Law be amended and combined to form the Foreign Investment Law.

Under the terms of the draft proposal, the existing requirement to examine and approve each and every instance of foreign investment will be removed. Instead, foreign investment management will be conducted via pre-access national treatment and a negative list will also be adopted.
These moves have been designed to considerably reduce the restrictive measures on foreign investment, while allowing foreign investors and their investment to enjoy treatment equal to that for their Chinese counterparts, according to a research paper prepared by the Hong Kong Trade Development Council.
The proposed Foreign Investment Law aims to deepen reform, expand opening up to the outside world, promote foreign investment, and better regulate foreign investment management.
With regard to the status of Hong Kong, Macau and Taiwan investors, the draft stipulates that the Foreign Investment Law will apply to all such investors. Where special treatment for Hong Kong, Macau or Taiwan investors is concerned, it is proposed that this should be provided separately by the State Council.
The draft embraces a total of 170 articles under 11 chapters, namely general provisions, foreign investors and foreign investment, access management, national security review, information report, investment promotion, investment protection, coordinated handling of complaints, supervision and inspection, legal liabilities, and supplementary provisions.
Please click on the following link for further information: Foreign Investment Law of the People’s Republic of China (Opinions Soliciting Draft). www.hktdc.org (ATI).