Draft Foreign Investment Law to be submitted at NPC plenary session

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01:39

China's Draft Foreign Investment Law (hereinafter referred to as FIL) will be submitted for review at the upcoming National People's Congress (NPC) plenary session that is scheduled to start from March 5. The decision was made by China's top legislature, the Standing Committee of the NPC, on Wednesday at the close of its two-day session on the second review of the draft in Beijing.

More details have been added to the draft, as the country aims to open its market wider to foreign investments.

The first draft of China's new FIL was reviewed last December and has stayed open for public comment since then. It says foreign investors will now enjoy "pre-establishment national treatment," and the second draft makes it more transparent.

"Foreign investors will enjoy treatment no lower than their Chinese counterparts during the process of establishing, attaining and expanding a company," according to Li Fei, director of the Legality Committee of the NPC Standing Committee.

But as legislators further review the new draft, some have other ideas.

Chinese lawmakers review the nation's new Draft Foreign Investment Law for the second time in Beijing, January 29, 2019. /CGTN photo

Chen Fuli, member of the NPC Standing Committee, said, "I think it should also include investments not aimed at setting up a company. For example, the joint exploration of oil and gas resources at sea by Chinese and foreign investors. So I advise changing the wording to 'market access process'."

Deliberations like this continued Wednesday. The new investment law will replace three older ones in place for 40 years. New clauses in the draft also say that in the future, foreign investors will set up businesses under China's Company Law and Law on Partnerships by following exact procedures that Chinese investors go through.

The top legislature said they heard opinions from experts, international business councils and investors before making these changes.

As China aims for a higher level of opening-up, the new FIL will help clear up a lot of complexities for foreign investors. Experts say it will form a new mode of dealing with foreign investment.