China, on Door-Step of WTO Accession, Amends Laws on Foreign InvestmentChina's top legislature, the NPC Standing Committee, has received a bill from the State Council to revise the three dominating statutes guiding overseas investment in the country.The bill, requested by the cabinet and signed by Premier Zhu Rongji, calls for a serious of amendments concerning the investment field, sum and authorization rights of the establishment of enterprises with investment from abroad. The original requirements that foreign-invested firms have to sell all or the majority of their products not in China, widely considered improper and running against the pledges China has made in bilateral and multilateral WTO entry negotiations, will be eliminated, sources said. The revisions on the three laws, concerning Chinese-foreign joint ventures, Chinese-foreign cooperative ventures and solely foreign-funded ventures in China, are intended to "facilitate China's impending accession to the World Trade Organization," the bill said. China's Foreign Trade Minister Shi Guangsheng, on behalf of the State Council, explained to the 18th session of the Ninth National People'S Congress Standing Committee, on Monday that the limitations on foreign investors in terms of foreign exchange balance, priority of material purchasing in China and selling products to overseas markets were deleted in the draft amendments. The current laws on China-foreign cooperative ventures and solely foreign funded ventures require such an enterprise "maintain the balance of foreign exchange in expenditure and income by itself." Also, foreign-funded and Sino-foreign joint ventures may purchase raw materials, fuel and fittings in the Chinese market or at the overseas markets as they like, replacing the stipulations that "priorities should be given to the Chinese market, '' Shi said. Solely foreign-funded enterprises in China are required by existing law to export all or most of their products, otherwise they must use high technologies and advanced equipment. Such wordings were rephrased as "the State encourages the establishment in China of foreign-funded ventures whose products are export-oriented or with high technologies." Sino-foreign joint ventures and solely foreign-funded ventures would no longer have to report their production and execution plan to relevant Chinese government departments, according to the revisions, which was compulsory in existing laws. "These revisions were based on the pledges of the Chinese government, made during negotiations for China's accession to WTO," Shi said. China's foreign reserves and other economic factors also allows for these revisions, the minister said, adding that some of the existing rules are not in line with market rules.(China Daily) |
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