China approved a new foreign investment law on Friday, March 15, to reportedly appease American business groups. The National People's Congress, the country's parliament, passed the decree that aimed to strengthen prohibitions against the Chinese officials and companies trying to steal trade secrets.
Only a few oppositions were against the foreign investment law after the votes were cast at the Great Hall of the People. According to The Washington Post, the law would allow the opening of more sectors for foreign investments and protecting foreign firms' rights and interests.
The state media immediately touted how foreign companies would benefit from the new bill. It even emphasized how it swiftly moved through the Chinese government in the past few months. There were reports it was tweaked this week to immediately address Washington's trade negotiators and foreign business groups' complaints in the country.
"The last-minute efforts are appreciated, but the changes shouldn't have been controversial in the first place and only address a small slice of the overall set of concerns our members have about the uneven playing field foreign companies encounter in China," Tim Stratford, chairman of the American Chamber of Commerce in China, said, per Los Angeles Times. Just like how business groups are concerned over how the trade talks roll out between President Xi Jinping and US President Donald Trump, they are also worried about the new foreign investment law.
A lot of U.S. lobbying interests is trying to urge Trump not to rush having a "vague deal" with China, knowing it fails to "resolve fundamental complaints" about its "unfair competitive practices." The country even neglects to give enforceable assurances that it will do what it says.
So to make things clear, Chinese Premier Li Keqiang revealed China's Cabinet would release more details and regulations about how they intended to implement the new foreign investment law. As the decree would still take effect in January 2020, he asked for everyone's patience.
"I have said many times that China's opening-up measures are often not launched as one package; they come out every year and even every quarter," Li said. "Then you turn around and realize they've cumulatively had an unimaginable effect."
The passing of the new foreign investment law came after Trump's administration tried to cool down the talk about the imminent trade deal. U.S. Trade Representative Robert Lighthizer said there are still a lot of major issues that they need to resolve before it happens. Although he is not yet sure if it could be set aside, more details about it would be out soon.
