Draft law upgrades treatment of foreign companies

Foreign companies will receive pre-established national treatment plus a negative list management system, and have equal rights to participate in activities, including issuing stocks and government procurement in China, according to a draft law made public by the country’s top legislative body on Sunday.

The draft law, released by the Standing Committee of the National People’s Congress, is expected to combine the country’s three foreign investment laws to promote and protect foreign investment. It will stick to policies of high-standard liberalization and facilitation of trade and investment, and significantly ease market access for foreign companies.

According to the draft, companies will not be regulated based on their ownership but on "who is in control".

Foreign enterprises in the Chinese mainland that are controlled by overseas investors will be considered foreign, while those controlled by Chinese investors will be regarded as Chinese.