2 July, 2019
On March 15, 2019, the China National People’s Congress passed the amended Foreign Investment Law. The amended law is the latest move by the Chinese government to promote its opening-up initiative. The initiative focuses on China implementing high-level investment liberalization and facilitation policies, developing foreign investment promotion mechanisms and striving to develop a stable, transparent and predictable investment environment.
The amended law addresses several key issues that have been highlighted in the ongoing trade dispute between the U.S. and China, including: (1) affirmation of the preestablished national treatment principle with restricted sectors listed on a negative list; (2) equal access and protection; (3) no expropriation of foreign investment; (4) increased intellectual property rights protections; and (5) prohibition of forced technology transfer by administrative means. The amended law is effective on Jan. 1, 2020.
The amended law, however, builds in certain caveats to these commitments, allowing China to avoid its commitments under particular circumstances and when it is in the public interest. While the amended law does not address all outstanding issues, it is an important step by the Chinese government to improve the Chinese legal system and increase foreign investment.
The hope is the amended law will lead to a more open, fair and transparent investment environment in China, ease foreign investors’ burdens in doing business in China and further promote foreign investment in China. The amended law was developed from the draft Foreign Investment Law, which the China Ministry of Commerce published on Jan. 19, 2015.
For the full article as first published in Law360, please click here.
For further information, please contact:
Yuanyou (Sunny) Yang, Duane Morris
yyang@duanemorris.com
