China has started formulating supporting regulations for its new foreign investment law, and these will be implemented simultaneously with the new law in January next year, said Minister-Counsellor Zhong Manying of the Chinese Embassy in Singapore.
At a sharing session on China's business environment yesterday, Ms Zhong stressed that China has "extensively solicited opinions from foreign investors, foreign commerce chambers and foreign-invested companies" in drafting the new law, which had earlier been criticised for being short on specifics.
The law, which was given the green light at China's annual parliamentary session last month, aims to address longstanding grievances by foreign businesses and comes amid talks with United States officials to end a trade war that has cost both sides billions of dollars.
It will eliminate the requirement that foreign enterprises transfer proprietary technology to Chinese joint-venture partners and protect against "illegal government interference", among other changes.
Foreign investors are expected to have the same privileges as Chinese companies in most sectors, except areas placed on a "negative list" covering those off-limits to non-state businesses or which require an application and approval process.
At the event at the SBF (Singapore Business Federation) Centre, Ms Zhong said the new law emphasises following the rules, aims to create a fair business environment, strengthens foreign investment protection and largely stands in line with international rules.
She added that work has started on supporting regulations that will complement the broad framework.
But specifics of these regulations, which are to be ready by the year end, will not be announced ahead of Jan 1, 2020, she told reporters on the sidelines of the event.
As of end-2018, there were over 960,000 foreign-funded companies in China, using US$2.1 trillion (S$2.8 trillion) in foreign investment.
SBF chairman Teo Siong Seng said the new law "reflects the commitment of the Chinese government to economic liberalisation".
"A more stable, transparent and predictable business environment in China gives more confidence to Singaporean investors and will bring more opportunities for Singapore businesses," said Mr Teo.
Mr Huang Xuhua, head of China practice at law firm Allen & Gledhill, said that while the new law has laid out the fundamental principles of promotion, protection and administration of foreign investments in China, it is also "quite general".
But he expects to see more foreign investments heading to China as it continues to improve its business environment: "It is anticipated that the foreign investment administrative system will be further relaxed and a revised version of the 'negative list' will be issued to open more sectors to foreign investors this year."