China Adopted New Foreign Investment Law


“The law will give more people confidence in China,” said Adam Dunnett, secretary general of the EU Chamber of Commerce. The law will become effective on Jan. 1, 2020


People’s Republic to further improve business environment. China adopted the new Foreign Investment Law at the second session of the 13th National PEople’s Congress (NPC) on March 15. According to experts, China marked a significant step towards further opening up its economy.

After taking effect, the unified law will replace the three existing laws on Chinese-foreign equity joint ventures (1979), wholly foreign-owned enterprises (1986) and Chinese-foreign contractual joint ventures (1988), that today are insufficient to deal with changing economic situation. 



China’s national legislature on Friday passed the foreign investment law, a landmark legislation that will provide stronger protection and a better business environment for overseas investors.The law will become effective on Jan. 1, 2020.

The new law shows China’s will and determination to follow through with reform and opening up in a new historical context, said Wang Chen, vice chairman of the NPC Standing Committee. “It is a full testament to China’s determination and confidence in opening wider to the outside world and promoting foreign investment in the new era.”

“For foreign companies in China, I think everyone is waiting for the law to be passed, as it will create a level playing field,” said Harley Seyedin, president of the American Chamber of Commerce in South China. “The law will give more people confidence in China,” said Adam Dunnett, secretary general of the EU Chamber of Commerce in China.


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.


New law main goal is to improve the transparency of foreign investment policies and ensure that foreign-invested enterprises participate in market competition on an equal basis. Foreign-invested enterprises will equally enjoy government policies supporting enterprise development, and be able to participate in standard-setting on an equal footing and in government procurement through fair competition, according to the law.



The law sends the signal of greater transparency, and will boost Chinese market’s appeal to foreign capital, said Vivian Jiang, vice chair of Deloitte China. Now, PRC will be able to better protect foreign investors’ legitimate rights and interests, and create a law-based business environment that is internationalized and enabling.

By the end of 2018, about 960,000 foreign-invested enterprises had been set up in China, with the accumulated foreign direct investment exceeding 2.1 trillion U.S. dollars. Foreign direct investment into China has ranked first among developing countries for 27 consecutive years, according to the United Nations Conference on Trade and Development (UNCTAD).

According to a survey of 240 companies by the chamber, the respondents plan to increase their reinvestment budgets from profits in China this year to an estimated total of 19.4 billion US. dollars, up nearly 40 percent from 2018.


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