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Fair treatment for foreign investments

CHINA DAILY | Updated: 2020-01-03 00:00
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The Foreign Investment Law, which took effect on Wednesday, marks another important step forward in the country's efforts to establish a market-oriented, law-based and international business environment that treats enterprises of all ownership equally.

As a comprehensive and fundamental set of legal standards for foreign investment activities, the new law provides unified provisions for the entry, promotion, protection and management of foreign investments.

It has been long in the making, but its implementation will put an end to the phenomenon of "letting firms in but not letting them do business" and address the concerns about forced technology transfers.

Rather than showing China's reluctance to embrace foreign players, the seemingly long time it has taken to enshrine what are now conventional rights and practices in developed countries in Chinese law reflects the prudent and progressive approach the country has taken to open up its markets and industries, and dock its institutional framework with the world.

Despite the pressures cast from outside on its so-called self-centered dealing with foreign enterprises, the country has maintained considerable strategic composure in adhering to the step-by-step route of opening-up and sought to strike a balance among different needs and interests.

In so doing, China has developed and the Chinese market has evolved to be the world's largest and fastest growing, creating great opportunities for foreign companies.

By the end of 2018, an accumulative total of 960,000 joint ventures had been founded accounting for $2.1 trillion of foreign capital, making China the largest actual user of foreign fund among developing countries for 27 consecutive years since 1992 according to the United Nations Conference on Trade and Development.

With China now advancing a new round of opening-up, it is expanding its market access to foreign investment by cutting its negative lists and putting more focus on establishing a law-based business environment that will ensure a more transparent and predictable environment to attract more foreign investment.

The law will regulate government behavior, and the authorities will also strengthen communication and coordination with foreign businesses to better protect their interests.

Fair competition is at the heart of a market economy, and impartial regulation is the safeguard for fair competition. The new law and accompanying regulations for its implementation mean the government will focus on establishing a law-based business environment that ensures that both domestic and foreign companies can thrive.

By creating a more open, transparent and fair business environment for foreign investments and better protecting their intellectual property, the law will give foreign companies greater confidence about investing in China and a greater sense of gain from doing so.

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