China's enactment of a new foreign investment law is expected to further facilitate high-quality investment while protecting the legitimate rights and interests of foreign investors, Wang Chen, vice-chairman of the Standing Committee of the National People's Congress, said on Friday.
Formulation of the law is a key measure in implementing central authorities' policies and plans to expand opening-up and boost investment, Wang told deputies at the second session of the 13th NPC. Wang called it a "full testament" to China's determination and confidence in opening wider and promoting foreign investment in the new era.
The top legislature is set to vote on the draft law on March 15. If approved, it would replace three statutes on wholly foreign-owned entities and joint ventures.
Efforts to unify foreign investment law are part of a decadeslong commitment to open up the economy. China will foster a world-class business environment, President Xi Jinping said at the opening of the first China International Import Expo in November.
According to the draft law, foreign enterprises would receive pre-establishment national treatment plus a negative list management system. It stipulates that the State would protect the intellectual property rights of foreign investors and encourage technology cooperation based on voluntary principles and commercial rules.
Zeng Hongqing, chairman of Guangzhou Automobile Group Co, said on Friday that China is expected to attract more investment once the measure takes effect.
Zeng, also an NPC deputy, said competition would be increasingly intense, with more foreign capital in the market. "But competition can motivate homegrown brands to develop and flourish. It's a win-win situation," he said.
Liu Chunsheng, an associate professor at Beijing-based Central University of Finance and Economics, said the law would let foreign businesses follow the same market entry regulations as their domestic counterparts, except for industries on the negative list.
"It will enable foreign businesses to form a clear, stable expectation of whether they can access the Chinese market," Liu said.
The legislation has taken about three months to develop, a process that usually takes a year or more. China's deep experience in opening-up and examples from mature market economies have allowed the accelerated schedule without sacrificing quality, Liu said.