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Saturday, March 7, 2015, 14:50

China plans to reform foreign investment law

By Dai Tian, Wang Jingjing, Zhao Tingting and Cai Muyuan

China plans to reform foreign investment law

China's Minister of Commerce Gao Hucheng takes questions from journalists at a news conference during the two sessions in Beijing, March 7, 2015. (Wang Jing/ chinadaily.com.cn)

China will reform the laws on foreign investment to create a more stable, transparent and predicable legal framework for investment, said Gao Hucheng, Minister of Commerce, on Saturday at a press conference.

The three laws governing foreign investment - the Law on Sino-foreign Equity Joint Ventures, the Law on Wholly Foreign-owned Enterprises and the Law on Sino-foreign Corporative Joint Ventures - was promulgated during the initial phase of China's reform and opening-up.

Gao said laws have contributed a lot to an attracting foreign investment, but some articles and contents cannot keep up with the current development.

The ministry released the draft law in January, and will revise and improve it to promulgate it as soon as possible, said Gao.

Other highlights of the press conference are as follows:

Spending spree overseas

More than 100 million Chinese took foreign trips in 2014 and their overseas consumption surpassed 1 trillion yuan ($159.62 billion), said Gao Saturday.

The main reason for the boom in overseas consumption is the price difference between the domestic and international markets, according to the minister of commerce.

The difference was primarily caused by high taxes and fees, especially the consumption tax on certain products, high cost of domestic circulation and price strategies of foreign brands, Gao added.

China plans to reform foreign investment law
This picture taken on Dec 2, 2012 shows Chinese tourists walking in the Ginza shopping district in Tokyo. (AFP PHOTO / TOSHIFUMI KITAMURA)

China, US complete text negotiation on BIT

Based on the consensus of presidents of the two countries, and after nine rounds of substantive negotiations, China and US have basically completed the text negotiation on Bilateral Investment Treaty (BIT).

Then, early this year, the two sides will change negative lists.

The completion of negotiation and the signing of the China-US BIT will have significant implications on global investment rules, said Gao.

China has confidence, ability to sign FTAs with the world

China's free trade agreement (FTA) talks with Australia indicate that China has the confidence and ability to develop the talks with countries and regions around the world, said Gao.

Australia is an important trading partner of China, and the country's market access rules, investment and trading codes, the related standards and all the management systems are almost the same as the developed countries in the west.

China has until now signed FTAs with 20 countries and regions around the world, covering nearly 30 percent of the country's foreign trade.

Based on the newly initiated China-ROK FTA, China will accelerate the FTA talks between China, Japan and the Republic of Korea (ROK).

Gao said the upgraded talks on China-ASEAN FTA will be the most important one in 2015.

'US case against export subsidies ill grounded'

The allegation filed by the US against China's export subsidies is ill grounded, Gao.

Gao added that the country respects World Trade Organization rules and will resolve the matter properly through dialogues or dispute settlement mechanism.

The comment came after the Office of the United States Trade Representative lodged a case at the WTO in February, claiming that the Chinese government offers export subsidies to industries ranging from agriculture to textile through "demonstration bases" and such support was illegal in international law.

Trade frictions can be seen as a "new normal" for China, as it is now the biggest goods trader, and should be resolved with a "common heart", said the minister.

"Dialogues among stakeholders have the highest priority," said Gao, adding that no industry or product can protect its own with trade remedy, and there have been many successful precedents where trade disputes were resolved through dialogues and negotiations.

Export growth will turn positive in March

China's export and import will end contraction and usher in a positive growth in March.

The foreign trade in February, based on the analysis of leading indicators, will remain a negative growth, but the decline rate will narrow significantly, said Gao.

Trade in January fell by more than 10 percent, with export sliding by 3.2 percent and imports plunging 19.7 percent, according to data from General Administration of Customs.

The country plans to set this year's target for foreign trade growth to 6 percent from 7.5percent, announced Premier Li Keqiang in the draft work report.

"Provided a fairly same environment with no significant changes compared to last year, international demand will remain a moderate growth, and we are confident to achieve the target," said Gao.

Apart from non-comparable factors, China's foreign trades grew 6.1 percent in 2014, with export up 8.7 percent, said Gao, adding that the sharp price decline in import commodity was the main reason why last year's target was missed.

Gao said the export growth in 2014 was a satisfactory, given the base of years of 9 percent growth from 2008.

"A fundamental estimate is that until now, we can't see any sign of a quick rebound to the price of resources, energy and bulk farm products," said Gao.

 
 
 
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