New rules to make it easier for investors . . .
China has unveiled new rules aimed at making it easier for foreign investors in its economy, part of Beijing's moves to implement its new foreign investment law and to secure an investment treaty with the European Union by the end of the year. On Monday, China’s Ministry of Commerce issued new rules to improve the complaint system for foreign investors. The rules broaden the scope of complaints, clarify complaint procedures and foreign investors’ rights, and strengthen complaint mechanisms, among other measures. These rules were followed on Wednesday by draft rules for foreign investors in China’s bond market, which are aimed at simplifying and standardizing procedures.
But past issues raise caution . . .
Foreign investors have long complained about China’s opaque investment environment and political interference in regulatory and legal decisions. China adopted a new foreign investment law in 2019 in part to counter growing international pressure to address these problems, and, amid the COVID-19 crisis, has touted these new rules as signals of an “economic resumption.” But it remains to be seen whether the new rules will meet international expectations, or if the de facto application of rules will still be heavily directed by Beijing or local party officials. While the new foreign investment law came into effect in January 2020 and new rules were already scheduled, the timing of the rollout coincides with a push by Beijing to secure an investment accord with the EU before the end of the year.
Beijing’s European whirlwind diplomacy . . .
In France on Sunday, Beijing’s top diplomat, State Councillor Wang Yi, signaled it was possible that seven years’ of work on the bilateral agreement could result in its signing before the end of the year. Highlighting the increased EU focus, Wang also stopped in Italy, the Netherlands, and Germany during his first trip abroad since the start of the pandemic, while the director of the Communist Party’s foreign affairs office will travel to Greece, Spain, and potentially Portugal this week, to be followed by an upcoming summit between President Xi Jinping and European Union leaders in mid-September. It remains to be seen whether Beijing’s investment rule changes and an EU-focused diplomatic whirlwind will herald new ties between the economic blocs.