Following the growing frustration of foreign firms on their ability to compete fairly with Chinese companies, the US and Chinese trade tensions emerged last year.
Under US President Donald Trump, the rhetoric under the spat focused on American trade deficit with China. As a result, tariffs of $ 250 billion of imported goods from China were implemented, and Beijing opposed a $ 110 billion US goods obligation. In recent months, negotiations between the two sides have always been more focused on intellectual property protection issues and demands for mandatory technology transfer.
There is little detail on the progress of the talks made publicly available. On Friday, Chinese state media said that the leaders of the two morning trade delegations in Beijing had telephone leaders and made "significant progress."
A few hours later, the symbolic collection of delegates supported the new foreign investment law. It took about three months from the time the NPC Standing Committee began to invite comments on its first draft.
"This is pushing forward through," said Lester Ross, chairman of the American Chamber of Commerce's policy committee in China. telephone interview with CNBC Thursday. "It is not giving this adequate time for public opinion from AmCham (and foreign affairs). The law has been drafted in a very general way."
Ross also noted that the draft gave China the right to go against a certain country to restrict Chinese companies there. "The law brings wider revenge," said Ross, who is a partner in the law firm Wilmer Cutler Pickering Hale and Dorr.
Essentially, such a clause reinforces the unequal base of foreign and Chinese companies to access each other's countries. US companies have complained that they are getting less access to China than in China.
But the Chinese government obviously wants to show that the interests of foreigners are included. At the last minute, Beijing added a new language which further protects foreign companies' commercial and trade secrets, according to a final draft reviewed by the US-China Business Council.
"Language imposes criminal penalties imposed out of sensitive sharing which takes foreign companies information more severely on counterfeiting and (intellectual property) theft and will give new ways of enforcing (intellectual property) enforcement," said Jake Parker, Chinese vice president of operations at the US-Chinese Business Council.
He noted that the Council is "happy" with the new language. He warned that “enforcement is the key metric for assessing success, but the business community has suggested that the Chinese government will impose criminal penalties on infringement (intellectual property), that we will make positive progress.
The law is to be applied on 1
On the whole, for foreign businesses looking after opportunities to profit from the world's second largest economy, the law gives them more incentive to enter the country. China, Ross said: "It's moving in a good direction. t it goes almost long enough. "