China’s new foreign investment law is too vague, says US business group
- American Chamber of Commerce in China welcomes legislation ‘in principle’ but says it doesn’t go into enough detail and needs more consultation
- Legislation is likely to be rushed through rubber-stamp legislature as part of efforts to meet US trade war demands
China’s new foreign investment law has received a lukewarm response from a leading US business group, which complained about a lack of consultation and detail.
Beijing hoped that the new law would help improve its image among global investors and also help address some of the concerns at the heart of the trade war with the US, but the American Chamber of Commerce in China said that the provisions were “still quite general” and did not go into specifics.
The group continued that “in principle [it] welcomes and appreciates” the new law, which is expected to be given final approval by China’s legislature on Friday, but expressed concern that foreign investors had not been sufficiently consulted.
“We are concerned that such an important and potentially far-reaching piece of legislation will be enacted without extensive consultation and input from industry stakeholders,” it said.
The law is due to go into effect on January 1 and promises fair treatment to foreign investors in China, forbids forced technology transfers and bans Chinese officials from leaking commercial secrets.
But the chamber said the law had not addressed concerns such as treating foreign and Chinese companies equally, the possibility that its broad protections will be overridden by industry-specific regulations and the broad scope of a proposed national security review.
