The chinese Parliament approves the new law on foreign investment

Le Parlement chinois approuve la nouvelle loi sur l'investissement étranger

A law meant to guarantee a fair treatment to foreign investors in China, seen as a response to the commercial pressures of the United States, has been finally adopted on Friday by the Parliament in Beijing.

The text has been approved by the national people’s Assembly (NPA, the chamber of registration of the communist regime) by 2.929 votes for, eight against and eight abstentions.

Supposed to respond to long-standing grievances of foreign enterprises in China, including the forced transfers of technology, the text has, however, been criticized by the chambers of commerce european and american, who have not had the time to make their suggestions.

According to the latest release reported by the media but not confirmed officially, the text provides that local and foreign investors are offered a “same treatment” on the chinese market, characterized by “a fair competition”. A request for a long time by many foreign companies who report unfair treatment.

The bill had been filed at the end of 2018 in response to the requirements of the United States.

Washington calls for structural reforms in China in the framework of the commercial war waged against Beijing. The us president, Donald Trump has accused China several times to “steal” the technology companies of the United States.

The text “precludes the use of administrative means to force foreign firms to transfer technology to chinese partners.

“The conditions of technological cooperation must be negotiated in a fair and equitable manner”, he says, at a time when Washington expects concrete measures from Beijing to combat the theft of intellectual property.

– Chinese courts in arbitration

The law needs to be enforced by the chinese courts, which foreign investors accuse happy to promote local businesses.

“There is a danger that the application on the ground of the laws (…) does not prevent full access to the market”, says the lawyer, Kyle Freeman, the firm’s investment advisory Dezan & Associates, questioned by the AFP.

In the open arms of the iron trade between Washington, China had proposed in December a first draft of the text of the law, as announced a few weeks later an increase of 10% to 25% of the customs duties in the United States on a large number of chinese products. Donald Trump had adjourned, the time to negotiate with Beijing.

The european Chamber of commerce in China had criticized a paper written in a hurry to pull off a trade agreement with the United States.

At A time when economic activity in China is slowing, Beijing also wants to make this law an argument for attracting more foreign capital.

Since the beginning of the year, the country has suffered a series of worrying results, including a drop of more than 20% of total exports in February.

The Prime minister Li Keqiang has lowered last week forecast China’s growth this year. It must be 6 to 6.5%, compared to 6.6% in 2018, its lowest level in 28 years.

The new legislation should enter into force on the 1st January. This text was the most anticipated of the annual session of the ANP, which ends Friday.