China’s top legislature, the National People’s Congress (NPC), passed the long-anticipated foreign investment law on Friday with a majority of 2,929 “yes” votes, eight “no” votes, and eight legislators abstaining, said Caixin.
The law will go into effect on January 1, 2020. It replaces three landmark laws passed during the 1970s and 1980s, which set the framework for the country’s transition from decades of economic isolation.
Zhang Yesui, an NPC spokesperson, said the law will “improve the openness, transparency and predictability of the investment environment, establish equal treatment for foreign and domestic investors, and address concerns of foreign investors around technology transfers.”
In addition to the law’s mandate of “equal treatment” of foreign and domestic companies, another notable element includes applying a so-called negative list nationwide. The negative list is a list of industries from which foreign investment in China is either prohibited, or in which investors are subject to greater scrutiny and restrictions.