On 28 February, Zang Tiewei, spokesperson for the Legal Work Committee of the Standing Committee of the National People’s Congress (NPC), gave a briefing on the implementation of the Foreign Investment Law over the past year or so. 

“Since coming into effect over a year ago, the Foreign Investment Law has created a more market-oriented, law-based, internationalized investment environment for foreign investors and foreign-invested enterprises (FIEs). Thanks to the implementation of the law, China’s utilization of foreign investment has increased despite the adverse overall situation in the face of the enormous challenge of the COVID-19 pandemic. The scale and global share of foreign investment have both reached an all-time high, making China the world’s largest recipient of foreign investment.” 

According to Mr. Zang Tiewei, the implementation of the Foreign Investment Law has produced significant results, leading to five positive changes: 

First, easier entry of foreign investment. With the thorough implementation of the system of pre-entry national treatment plus a negative list management, more restrictive measures have been removed. At the same time, the choice of investors has become more autonomous, and the Foreign Investment Law has opened the door for Chinese natural persons to directly participate in foreign investment. In 2020, nearly 9,000 FIEs were established as joint ventures between foreign investors and Chinese natural persons. 

Second, greater facilitation of investment activities. The filing requirement for the examination and approval of the establishment and changes of FIEs in the business sector has been completely abolished, and an information reporting system has been introduced instead. Moreover, the two sets of formalities in the administration of the establishment of FIEs have been reduced to one. In addition, the filing and approval procedures for foreign investment projects have been further simplified, while services for the entire process of foreign investment projects have been optimized. 

Third, sounder service system. Under the foreign trade and foreign investment coordination mechanism of the State Council, dedicated work teams have been set up for key foreign investment projects, forming a service system with horizontal cooperation and vertical linkage. At the Central Government level, officials have solved 252 difficult problems besetting FIEs, such as shortages of materials for epidemic prevention, hindered cross-border logistics, and coordinated resumption of production upstream and downstream. 

Fourth, more effective protection of rights and interests. The Working Measures for Complaints Filed by Foreign-invested Enterprises has been promulgated, a name list of institutions handling complaints in various localities has been compiled and published. This makes it easier for FIEs to file complaints through a clearer and more operable process. 

Fifth, fairer market competition. The Foreign Investment Law provides a solid legal guarantee for FIEs to participate in government procurement and bidding on an equal footing. Government departments have acted according to the law to eliminate the abuse of administrative powers to exclude and restrict competition in government procurement and bidding. This has effectively ensured the order of fair competition.