China foreign investment law: Bill aims to ease global concerns

China-US trade war: New Chinese law seeks to address concerns

Politicians in China have passed a new law loosening regulation on foreign investment, in what is being seen by market watchers as a move to appease Washington in the country's ongoing trade war with the United States.

US President Donald Trump is demanding China to reduce the United States dollars 375 billion trade deficit, provide legal protection for intellectual property rights (IPR), technology transfer and more access to American goods to Chinese markets.

In a work report mapping out policy direction for this year, the government of the world's second-biggest economy downgraded its gross domestic product growth target to 6.0 to 6.5 percent for 2019 from last year's target of about 6.5 percent. "We will closely monitor the FIL's implementation to ensure that it is fully respected at all levels of government and in all corners of this country", said Mats Harborn, president of the EU Chamber of Commerce in China.

Chinese President Xi Jinping and Chinese Premier Li Keqiang cast their votes on the new foreign investment law at the closing session of the National People's Congress (NPC) in Beijing.

A law recently enacted by Beijing that obliges Chinese companies to aid the government on national security has added to the concerns.

"China's protection of domestic industry is a long-running concern for foreign business", said Diana Choyleva, chief economist at research firm Enodo Economics.

But since earlier this month, VPN connections have apparently stopped working regularly in China, internet users said.

In addition, the new law has also met many demands raised previously by foreign businessmen.

China-US trade war: New Chinese law seeks to address concerns

China will work to ensure the employment of college graduates, whose number will reach a new high of 8.34 million this year. The other two were the Law on Foreign Capital Enterprises passed in 1986 and the Law on Sino-foreign Contractual Joint Ventures promulgated in 1988.

"The leadership needs not only to control these perceptions to maintain their leadership but also to prevent social unrest and dissatisfaction with the leadership from achieving a critical mass", added Nagy, a fellow at the Asia Pacific Foundation of Canada.

"In actual practice, our goal is to generate the same amount of job opportunities as we did previous year, which is over 13 million", Premier Li Keqiang told a press conference after the conclusion of the annual session of China's national legislature Friday.

"What prosecutor is going to bring a case against a Communist Party official?" one person in the USA business community asked.

The National People's Congress voted 2,929 in favour of the law -with eight against and eight abstentions - barely three months after a first draft was debated, an unusually quick turnaround for the legislature, which meets once a year.

China's number two leader yesterday denied Beijing tells its companies to spy overseas, refuting United States warnings that Chinese technology suppliers might be a security risk. The two sides slapped tariffs on exports worth hundreds of billions of dollars a year ago.

As talks continue, Washington has extended the March 1 deadline, but the world's two largest economies have remained divided over what Washington calls Beijing's "unfair" trade practices, such as alleged intellectual property theft and forced technology transfer.

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