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Asean & Global Updates
POSTED | 9:46 AM | 20-01-2015

China’s new foreign investment law on the cards

Foreign investors will have to gain security clearance from the Chinese government for investments that are considered harmful to national security, according to a draft law made public on Monday (19 Jan 2015), which among other things seeks to provide easier access to the Chinese market.

The draft foreign investment law, which was released by the Ministry of Commerce, stipulates that the State Council will set up a joint ministerial mechanism to carry out security reviews on foreign investment. Experts said the procedure is similar to the review system in foreign countries.

According to the draft law, foreign investors can apply for the review proactively if they feel that their investment threatens China’s national security.

In addition, related government agencies, industry associations, enterprises in the same industry or in the production chain can also make suggestions to the central government to conduct such evaluations on foreign investors, and the joint ministerial mechanism will make the decision on whether a review is necessary or not.

The draft law lists involvement in defense, energy, grain, information technology and some others as potential sectors for such reviews.

The full text of the draft law is available on the ministry’s website, and the public can submit feedback before Feb 17 by visiting the website www.mofcom.gov.cn, or by sending an e-mail to investmentlaw@mofcom.gov.cn or sending fax to 010-65198905.


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