China's top legislature adopts new Foreign Investment Law
Mar 15, 2019 (China Knowledge) - China’s new Foreign Investment Law (FIL) has been adopted by the country’s top legislature during the closing meeting of its annual session today with the new law coming into effect from 1st Jan 2020.
The new law which was first drafted in 2015 attempts to address outstanding concerns foreign investors have over perceived unfair trade practices and market access. After two revisions of the draft, the Standing Committee of the 13th National People’s Congress passed the FIL to attempt to level the playing field for foreign businesses and attract more foreign investments.
According to the FIL, Chinese officials are prohibited from revealing commercially confidential information they obtain from foreign businesses or from favouring Chinese firms. This comes in response to allegations from US President Donald Trump over the theft of commercial secrets from foreign investors in China.
The FIL has been formulated to integrate three existing laws on foreign investment which are the Chinese-Foreign Equity Joint Ventures, Chinese-Foreign Contractual Joint Ventures and Foreign-Owned Enterprises law.
These laws which were passed during the early stages of China’s reform and opening up are no longer relevant in today’s Chinese market and the new FIL is tailored to meet a higher standard of opening-up under the current new circumstances.
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