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March 18, 2019

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Home » Business » Finance

Businesses welcome law on foreign investment

CHINA’S newly passed foreign investment law will benefit foreign investors and companies, and will help improve the country’s business environment, experts said.

China’s national legislature on Friday passed the foreign investment law at the closing meeting of its annual session. The law will become effective on January 1, 2020.

Beijing will introduce a series of regulations and documents in accordance with the law to better protect the legitimate rights and interests of foreign investors, Chinese Premier Li Keqiang said.

The new law clearly bodes well for foreign investors, especially in terms of market access and equal treatment, said Mario Ohoven, president of the German Association for Small and Medium-sized Businesses.

It will help create much better conditions for foreign investors and help them plan long-term returns on investments in China, Ohoven said.

“The new law promises more security for foreign companies investing in China,” Ohoven said, while urging German companies to take advantage of the new opportunities.

Sudheendra Kulkarni, an Indian expert on China, said the law should be welcomed by all since it shows China’s commitment to reform and opening-up.

At a time when protectionist sentiments are increasing, China’s new law will reassure foreign investors, foster fair competition and create a transparent business environment for foreign firms, said Kulkarni, former chairman of Observer Research Foundation Mumbai, an Indian think tank.

China is making changes to strengthen foreign investment regulations, said Hans Hendrischke, a professor of Chinese business and management at the University of Sydney Business School.

Hendrischke said the Chinese government’s approach shows that it has been listening to the concerns raised by business sector representatives, and is willing to introduce regulatory changes to improve the country’s business environment.

“It’s a very important piece of legislation that people have been waiting for a long time because it will change the working environment for foreign investors in China — and it will most likely have an impact on the way in which Chinese investors can work overseas,” Hendrischke said.

“So economically speaking, business-wise, it’s of global importance,” Hendrischke added.


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