O’Melveny Worldwide

Call for Comments: China’s Foreign Investment Law (Draft)

January 9, 2019


The Chinese government has released the second draft of the Foreign Investment Law (the “draft law”), which will replace three existing laws that regulate joint ventures and wholly foreign-owned enterprises (WFOEs). Mechanisms related to facilitation, protection, and management of foreign investment are written into the draft law, enshrining the negative list, national treatment, and equal participation in government procurement. 

In particular, the law bans mandatory technology transfers and specifies that goods produced by foreign companies in China should be given equal treatment in government procurement. The draft also states that China has the right to take reciprocal actions against any countries that discriminate against Chinese investment and includes a national security review system for foreign investment.

The American Chamber of Commerce in Shanghai has requested that O’Melveny provide comments to the draft law. AmCham China and the US Chamber of Commerce will submit comments received to the National People’s Congress.

As we prepare our comments, we want to invite you, our clients and friends who have similarly been monitoring these developments, to share with us your views, comments, or questions. We will take your comments into account (respecting your privacy – on an unattributed basis) as we prepare our submission. To share your views or to request to speak to an O’Melveny attorney to share your views by phone, please contact Chris Schob.

We ask that you send us your comments by Thursday, January 17, China time. You may respond in English or Chinese (our submission will be made bilingually).

For reference, the draft law is available here (Chinese), and an unofficial English translation here. If you would like to receive a copy of O’Melveny’s comments, please contact Chris Schob, and we will make them available once ready.

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