Officials say that the amendment of China's Foreign Investment Law is an innovative improvement for the country's foreign investment legal system. The law is necessary to attract more foreign investments, protect foreign investors' legitimate rights and interests so as to foster a favorable environment for doing business.
The draft has gone through two readings by the National People's Congress Standing Committee.
Financial experts have a variety of opinions on what the introduction of an amendment to China's foreign investment law means for the country and overseas investors. CGTN Senior Correspondent Tian Wei sat down with Zhang Yichen, a CPPCC member who's the Chairman and CEO of CITIC Capital, on what changes of the law will bring to China and to foreign investors.
Zhang believes it is a big step forward in intellectual property protection. "The current amendment to China's foreign investment law is showing the world that China is eager to protect intellectual property. And China will forbid forced technology transfer to address concerns from outside. I think in terms of market access, we could do better in some ways, because fundamentally if you look at it from the central government's perspective, I think the policy always being clear. But China is a huge country; the situation varies from province to province. So these are the issues China needs to address, in order to assure the world that China is open. China will reform more, and China will follow the international rules."
Zhang also mentioned when China opened up first in 1979, it was one of the first laws the country put in place in order to assure foreign investors could actually come to China and set up joint ventures. The country has certainly come a long way from those days and it continues to make improvements. He thinks it says a lot because China is the most favored destination for FDI among developing nations by far.
"I think it is going to be more market-driven than before, the government is committed to the negative list rather than specific approvals. So I think the negative list will shrink the size, and over time more and more sectors will be open completely to foreign capital," said Zhang.
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