It took only roughly three months for the Foreign Investment Law of the People’s Republic of China (the “FIL”), the basic law of foreign investment in China, to come after its draft was debated, demonstrating an almost unprecedented fast turnaround in the legislation history of China. In response to China’s domestic demands for change of its foreign investment laws and against the background of China-U.S. trade talks, the FIL introduces many fundamental changes to China’s foreign investment law system, which currently consists of, inter alia, three main laws that the FIL is to replace - the Law of the People’s Republic of China on Sino-Foreign Equity Joint Ventures, the Law of the People’s Republic of China on Sino-Foreign Contractual Joint Ventures and the Law of the People’s Republic of China on Wholly Foreign-Owned Enterprises (collectively, the “Three FIE Laws”). If compared with the Foreign Investment Law of the People’s Republic of China (Draft) that was published in 2015 but ultimately failed to pass into law (the “2015 Draft”), the FIL also varies significantly, whether in positioning, orientation or content.
This article is intended to give a full picture of changes in China’s foreign investment laws and regulations in terms of key issues involved in the China-U.S. trade talks by highlighting the major differences of the FIL with the Three FIE Laws and the 2015 Draft in these regards. On that basis, this article further draws a brief comparison between the FIL and the 2015 Draft with a view to study the regulatory inclination of the FIL’s prospective implementing rules, combs through supporting laws and regulations in the field of foreign investment to exhibit the changing trends of foreign investment legislation, and then gives a look to the future implementation of the FIL based on our preliminary research on pilot program policies.