Source:Global Times Published: 2019-4-18
The release of China's newly approved foreign investment law, which aims to protect overseas investment, showed the confidence of the country's system as well as the maturity of the Chinese market, an expert said on Thursday.
"Many people wondered why such a law came into being at this moment instead of 10 years ago? In fact, it is the proper timing at present since the country has enough resources, talent, experience and a relatively mature market to attract overseas capital," Liu Zhiqin, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told a briefing in Beijing.
But 10 years ago, the scope and depth for China's opening-up "were immature" and the country lacked experience and talent to help ease market access for foreign investors in sectors like finance, Liu noted.
As more foreign capital has entered the Chinese market, due legislation is needed to protect their interests, he said.
The new foreign investment law, which was adopted by the country's top legislature on March 15, is the first of its kind and will come into effect on January 1, 2020.
It provides a legal basis for various aspects of foreign investment ranging from classification to management and gives overseas investors equal treatment, greater access and better legal protection.
With the new law comes fundamental and institutional change, as it shows that China's confidence in its system has reached a new level and the domestic market has gradually become mature, Liu said.
As the country is committed to further opening-up, foreign companies in China do not need to access the market through forced technology transfer, noted Liu.
Administrative agencies and their staff are prohibited from using administrative means to force any technology transfer, according to the new foreign investment law.
"The new foreign investment law reflects China's determination to further reform and open up," Wang Xiang, deputy head of the Office for Economic Law of the National People's Congress's Legislative Affairs Commission, said at the same briefing.
It is the attitude that China's legal system has toward foreign investors, a clear signal that the country will open more sectors to foreign investors through efforts such as further shortening the negative list, Wang said.
Wang also told the Global Times on Thursday that if foreign investors are involved in disputes with government departments during their investment in the Chinese market, there is a sound dispute settlement mechanism to protect their legitimate rights and interests.
Liu Zhiqin is a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China.