China’s top legislature the National People’s Congress (NPC) is going to review the country’s draft foreign investment law at the second session of the 13th NPC, which will kick off on March 5 in Beijing, China Newsweek reported on Feb. 22.

The draft law was published on the NPC's official website on Dec. 26, 2018, to gather public comments before Feb. 24. Once adopted, the law will become the fundamental unified law governing foreign investment in China.

Moreover, this unified law will replace three existing laws in the field: the laws on Chinese-foreign equity joint ventures, non-equity joint ventures (or contractual joint ventures) and wholly foreign-owned enterprises.

The draft law will give priority to the promotion and protection of foreign investment, according to Ma Yu, director of the foreign investment institute of the Chinese Academy of International Trade and Economic Cooperation (CAITEC), China’s Ministry of Commerce.

The draft law will also stipulate the implementation of high-level policies on investment liberalization and facilitation, the establishment and perfection of foreign investment promoting mechanisms, and the creation of a stable, transparent, and predictable investment environment, disclosed Ma, who has been a long-time participant in the research on and drafting of the law.

Additionally, the draft law will include pre-established national treatment and negative list management, significantly reducing access restrictions and improving transparency and management efficiency, said Ma.

The acceleration of the legislative procedure of the draft foreign investment law is not only a result of anticipation from both inside and outside China, but also indicates that NPC deputies and relevant representatives have reached a consensus on the law, explained Kong Qingjiang, Dean of the School of International Law at the China University of Political Science and Law.

All this is probably connected with the country’s endeavors to boost opening up, stressed Kong, noting that “after all, a sophisticated foreign investment law is a demonstration of China’s commitment to promote institutional reforms further and open its market wider to the rest of the world.”

According to Kong, with the deepening of China’s opening up and the outbreaks of trade friction, to further promote opening up and define the orientation of reform and opening up by law has become an urgent need.

Ma shared shared Kong's viewpoint, noting that China’s acceleration of legislative procedures for the new foreign investment law is the product of real concerns, such as the trade and investment paths that are mentioned in trade negotiations and the issues concerning intellectual property rights and national treatment.

Besides, many trade rules and investment rules in the reform of the World Trade Organization (WTO) are related to investment, such as competition rules, government procurement, specific information products, and trade in services, said Ma.

If China wants to join higher level bilateral or multilateral trade agreements in the future, it must have a suitable legal system, explained Ma.