China Speeds up to Pass New Foreign Investment Law

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China’s legislature National People’s Congress is widely expected to approve a foreign investment law on its annual convention from March 5 to March 15, Dai1 Media reported.  

The law will ban forced technology transfer from overseas investors to Chinese partners, according to a draft bill released on Dec. 26 for public comment through Feb. 24. (link in Chinese)

“China encourages voluntary technology cooperation that follows business rules,” the bill says. “The conditions of such cooperation should be determined by the relevant investors. The administration and its staff should not force any technology transfer through administrative means.”

It seems good news for overseas investors in China, but some foreign business groups are not happy with it, according to reports of the Wall Street Journal and the New York Times.

They said Beijing hurries to pass the law, in response to Donald Trump’s criticism of the Chinese business environment though lack of details, in order to ease the trade tension with the U.S.

The draft law has only 39 articles, most of which are single-sentence statements on complex issues. As China is eager to pass the law, it also fails to provide enough time for foreign investors to express their concerns.

China once released a draft foreign investment bill as early as in 2015, which has 170 articles and never got passed amid concerns about the law’s enforcement and implementation issues.