Former Director-General of the WTO: China’s Foreign Investment Law is in the right direction

Pascal Lamy, former Director-General of the WTO (People's Daily Online/Wang Yuran)

“China’s Foreign Investment Law is in the right direction. Investing in China should be less cumbersome than in the past. So it should be facilitated,” during the China Development Forum 2019, Pascal Lamy, former Director-General of the WTO told People’s Daily Online in an exclusive interview after his meeting with Chinese Premier Li Keqiang.

China's national legislature passed the foreign investment law at the closing meeting of its annual session on March 15. With unified provisions for the entry, promotion, protection, and management of foreign investment, it is a new and fundamental law for foreign investment in China.

“We have to wait and see how the implementation goes, but I think it brings the playing field more leveled and for this reason, I think it’s a good step forward,” Lamy noted.

For Lamy, what impressed him most about the Reform and Opening-up Policy would be the long-term growth of Chinese economic development. “China’s economy has been growing roughly 10 percent per year, without any major crisis, like in the US, or Latin America or some say in EU. The growth performance is absolutely stunning, and by the way, it is probably not replicable as well. It worked because China opened and reformed, and this I think it remains true for the future. If we want this exceptional performance of China to be maintained, China needs to keep opening and reforming,” he said.

“I think China is an exceptional case. I don’t think there is a Chinese model that others can replicate. A large part of the success sterns from the size of this country, and the economy of the scale, which the size of the consumer market allows are not available anywhere else. Even India, which is roughly as populated as China, has not succeeded in growing its economy as fast as China did. So, there is something specific,” he added.

Lamy believes China’s deepening reform and opening-up is a “win-win game over the world” and “the interaction with the Chinese economy which is now extremely big makes the world economy becomes more cooperative”.

Lamy took the changes in the relationship between TWO and China as an example to demonstrate an open trade system will propel the world economy development going in the right direction.

“When it joined [WTO] 20 years ago, China was a relatively mid-sized economy. Twenty years later, it has totally changed. China has become a major elephant like the US, like the EU in world trade. So China cannot just be a follower of the others. China has to step up its game in the WTO. Be prepared to adjust a number of rules and take the sort of leadership role which is commensurate with the size and responsibility it has within the organization,” he said.

“China needs open trade to grow its economy, and it has been advocated by the Chinese leadership for a long time,” he noted.