China eyes further opening-up in updated draft foreign investment law

BEIJING - The Standing Committee of the National People's Congress (NPC) on Tuesday started reviewing a new draft of the foreign investment law, the latest move to promote the country's opening-up initiative.

During the two-day session, members of the top legislature are scheduled to deliberate a new version of the draft law, which has been updated from the first draft submitted to the previous session last month.

Once adopted, the unified law will replace three existing laws, namely the laws on Chinese-foreign equity joint ventures, non-equity joint ventures (or contractual joint ventures) and wholly foreign-owned enterprises.

To better implement the report of the 19th National Congress of the Communist Party of China in 2017, the new draft further expanded the article on the system of pre-establishment national treatment plus a negative list, said Li Fei, chairman of the NPC Constitution and Law Committee, while presenting the new draft to lawmakers.

Definitions of the terms were included in the article, in addition to a clause requiring the state to give national treatment to foreign investments outside the negative list.

In line with provisions in the Constitution, the new draft proposes that the state shall not expropriate or requisition foreign investment, adding that it could only do so under particular circumstances and in the public interest.

If the state expropriates or requisitions foreign investment, "due legal procedures must be followed while prompt, fair and reasonable compensation should be made," it noted.