China has revealed more details about its new Foreign Investment Law due to take effect next year, but researchers and foreign investors want more, reported Caixin.
The release of the draft of the law’s implementation guidelines, published Friday by the Ministry of Justice, offers a glimpse into how far Chinese lawmakers are willing to go to address foreign companies’ complaints about unfair treatment, including forced technology transfers. That issue of technology transfers, in which foreign firms say they are railroaded into handing over valuable intellectual property to Chinese partners in order to operate in the country, is one of the thorniest issues behind the China-US trade war.
According to the draft of the guidelines, authorities will be banned from forcing foreign investors to transfer technology when registering businesses, giving permission for investment projects, undertaking inspections and meting out punishments. The draft is currently open to public comment and has been sent to foreign companies and chambers of commerce for feedback.
The draft suggests that forced technology transfers will be banned not only when foreign investors apply for access to the Chinese market, but also when regulators and businesses engage on other matters, said Cui Fan, a professor at the Beijing-based University of International Business and Economics.