China approves foreign investment law hopefully to improve relations with US

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

The new law was attempting to help level the rulebook between domestic firms and foreign investors in the country.

The Chinese National People's Congress voted 2,929 in favor of the law - with eight against and eight abstentions - barely three months after a first draft was debated, an unusually quick turnaround for the legislature, which meets once per year.

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

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.

US President Donald Trump is demanding China to reduce the United States dollars 375 billion trade deficit, provide legal protection for intellectual property rights (IPR), technology transfer and more access to American goods to Chinese markets.

Chinese Premier Li Keqiang said China further eased its policies to attract foreign investments to the country.

Eric Liu, managing partner for Zhao Sheng, Linklaters" joint operation partner in China, said "the proposed changes will definitely be welcomed by foreign market participants and lead the next upsurge in foreign investment.

Shares on Chinese stock exchanges climbed after the government reaffirmed its commitment to boosting growth. But the new law "doesn't tackle" that problem, she added. "All laws and regulations will continue to provide the Communist Party of China (CPC) with a great deal of room for maneuver to intervene, albeit not explicitly", she underlined.

World shocked amid right-wing terror attacks on mosques
Imran Khan, Pakistan's prime minister, also expressed his condolences and said he was alarmed by the further rise of Islamophobia. A fourth person was apprehended but later released after it was determined to be an armed bystander trying to help authorities.

Beijing has promised that a new foreign investment law will introduce measures to better protect overseas companies operating in China.

They "could easily be used as pretense to discriminate against foreign companies", analysts at consulting firm Trivium China wrote in a commentary this week.

Tim Stratford, chairman of the American Chamber of Commerce in China, was quoted by AFP as saying that the changes "only address a small slice of the overall set of concerns our members have about the uneven playing field foreign companies encounter in China".

The chamber was concerned about vague language in provisions that allowed local governments to expropriate investments that "harm public interest" and the inability to appeal against the outcome of national security reviews.

Victor Shih said Beijing could come up with regulations that make life hard for foreign companies operating in the country.

In addition to the law's mandate of "equal treatment" of foreign and domestic companies, another notable element includes making nationwide the so-called negative list - which defines which industries or activities foreign businesses are able to operate in.

The legislation aims to address long-running grievances from foreign businesses, but the United States and European chambers of commerce have voiced concerns that they were not given enough time to give their input.

Had the two parties not reached agreement by that date, the USA had prepared a fresh round of tariffs on Chinese goods, before president Donald Trump confirmed he was pushing back the deadline.

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