China's new foreign investment law (FIL) will take effect on Jan. 1 to address feedback on what is perceived as forced technology transfer and lack of intellectual property protection of foreign companies doing business in the mainland.
'Surprisingly accommodating to all concerns we have' is what Joerg Wuttke, president of the European Union Chamber of Commerce in China says as the agency takes a preliminary look at the FIL.
Once completely implemented, the landmark law will address the major business concerns like intellectual property rights and ease of doing business in the mainland.
According to World Bank's newest reading of the index, ease of doing business with China ranks 46th in the world.
It is with this new FIL that Beijing will show its commitment to a more equitable and transparent business environment for foreign investment.
Chinese authorities' announcements the past few weeks also hinted at removing foreign investment limits in some parts of the local financial industry.
Starting January 1, there wouldn't be transferring of valuable technology in order to do business in China and there would be improved protection of trade secrets.
In March, the FIL got approved at the annual congress three months after it got placed on the agenda by Chinese policymakers.
That time, worry from business leaders came up that the FIL might get passed into law quite quickly.
Their worry was brought about by its vague wordings which might cause difficulty in the law's implementation.
This is why the Chinese government is soliciting comments on it before its implementation.
According to Wuttke, the EU Chamber got a copy of the FIL to review on Oct. 10 with 20 days to respond.
The past weekend also saw closed-door meetings with business leaders in relation to the FIL.
The Commerce Ministry confirmed that the FIL is also scheduled to be seen by the General Administration of Customs, the Ministry of Commerce and the State Administration of Market Supervision at the Qingdao Multinationals Summit that will be held in Shandong province.
Improving the business environment for foreign companies brought about by the FIL will bring more capital and jobs and likewise help the Chinese industry with standards in line with globally recognized ones.
China's FIL puts emphasis not only on providing a level playing field for foreign firms but it also obligates local governments to treat foreign investments on a standardized framework of administrative actions.
