Following increasing frustration on the part of foreign companies about their ability to compete fairly with Chinese companies, the US and China came under trade tensions last year.
Under US President Donald Trump, the spade's rhetoric initially focused on the American trade deficit with China. This resulted in the application of customs duties on imported goods worth $ 250 billion from China, which Beijing faced with tariffs on goods worth $ 110 billion from the United States. In recent months, negotiations between both sides have increasingly focused on issues of intellectual property protection and claims of forced technology transfer.
Little details have been published on the progress of the talks. Chinese state media said Friday that the leaders of both trade delegations held a telephone conversation and made "significant progress" in Beijing this morning.
A few hours later, the symbolic assembly of delegates approved the new law on foreign investment. It only took about three months since the NPC's Standing Committee had requested comments on its first draft.
"This is in a hurry," said Lester Ross, chairman of the Political Committee of the American Chamber of Commerce in China, a telephone interview with CNBC on Thursday. "This does not give adequate time for public statements by AmCham (and foreign companies) and the law is formulated in a fairly general manner."
Ross also noted that the draft allowed China the right to retaliate against a particular country because it restricted the Chinese restrictions on business there. "The law provides a broader retaliatory measure," said Ross, who is also a partner in the law firm Wilmer Cutler Pickering Hale and Dorr.
Such a clause essentially strengthens the unequal basis that foreign and Chinese companies have in accessing each other & # 39; Countries. US companies have complained that they have less access in China than Chinese companies in America.
However, the Chinese government is clearly trying to show that it has the interests of foreigners in mind. At the last minute, Beijing even added a new language that provides further protection for the business and trade secrets of foreign companies, as stated in a final draft by the US-China Business Council (1
He noted that the Council The new language is "satisfied." He warned that "enforcement will be the key to assessing success. However, for years, the economy has been pushing for the Chinese government to impose criminal sanctions on intellectual property. We must recognize this positive progress for this purpose. "
The law is due to enter into force on January 1, 2020. It is expected that three existing rules will apply to joint ventures, wholly foreign-owned companies, and contractual joint ventures Translations are abolished, as stated in an English translation of the draft China Law.
For foreign companies looking for ways to benefit from the world's second largest economy, the law gives more incentive to Entering China, Ross said, "It is moving in a good direction. It does not. "It's almost far enough."