China seems to be making a new law regarding foreign investment. It is clearly an attempt to appease Washington in the process of negotiators trying to rescue the two biggest economic forces of the world, out of the tangle of the current trade war.
On Friday, approximately 3,000 delegates at the annual NPC or National People’s Congress of China will be seen endorsing this new law. Keeping with the trend of how things are normally executed, there will be no opposition to the legislation.
Usually, there are very few individuals voting against the motion when votes are taken, out of which some are mostly for show as a 100% consensus on a motion would appear to be ridiculous.
In the rare case of a pushback affected against a bill draft leading to amendments, it occurs a long time before NPC sits with the motion. Usually, it is decided upon in a number of meetings of the standing committee, held in closed quarters and the process may extend for years.
This time around, the process lasted only for 3 months. The government of China seems to have hurried through this law to extend a peace offering to the United States during the ongoing negotiations regarding the trade war.
But, for a major faction of the business network in China, this appears to be less of an enforceable and concrete body of rules and rather, a vague compilation of intentions. They’re afraid of it being potentially prone to changing and different interpretations. The high-profile items being addressed by the law for foreign companies will include unjust subsidies to China-based companies as well as theft of intellectual property.
However, this law will not be of help to one and all. There exists a well-defined “black list” consisting of nearly 50 sectors. These will remain closed in case of foreign investments, and in certain cases, will not be open if not under special permission or preset conditions.