Premier Li Keqiang reassures Hong Kong over mainland China’s foreign investment law
- Some in the city worried it would miss out on benefits of tweaks to how overseas companies are treated
- But premier offers highest-level affirmation yet that it will not
Speaking at a press conference with domestic and international media, Li said: “The foreign investment law may be used as a reference in relation to investments from these three regions. Moreover, the institutional arrangements and actual practices that have long been in place and proven effective will go on.”
The new law, set to come into effect on January 1, 2020, is intended to level the playing field for overseas investors and reassure the global community that China remains an attractive investment destination, by tweaking the rules around things such as market access and forced technology transfers.
Businesspeople in Hong Kong had raised concerns that the new law – whose draft did not mention Hong Kong, Macau or Taiwan – would not apply to the city, depriving them of its benefits.
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Li’s was the highest-level affirmation yet that that would not be the case. It came hours after the national legislature, the National People’s Congress (NPC), approved the law with 2,929 supporting votes, eight opposing and eight abstaining, at its closing meeting on Friday morning.
On March 4, a day before the annual NPC assembly opened, its spokesman Zhang Yesui clarified that the three regions would be covered by the new law. On Monday, Beijing’s top official for Hong Kong and Macau affairs, Zhang Xiaoming, said the same.
Li said on Friday that Beijing attached high importance to investments from Hong Kong and Macau because they accounted for 70 per cent of all foreign investments on the mainland.
“We will further harness the advantages of Hong Kong and Macau as separate customs territories and free ports ... We are going to create more favourable conditions for businesspeople from Taiwan to invest on the mainland,” Li said.
We will further harness the advantages of Hong Kong and Macau as separate customs territories and free ports
Li also promised that, when making policies and directives on foreign investment, the State Council would listen carefully to opinions from the three regions and protect investors’ lawful rights properly.
Beijing rushed the foreign investment law through the country’s largely ceremonial legislature in an effort to fend off complaints from the United States and Europe about unfair trade practices.
The law attempts to address outstanding concerns from foreign investors, such as unfair treatment with regards to market access and government procurement, forced technology transfers to Chinese partners and the theft of commercial secrets from foreign businesses in China.
The law was amended this week to make it clear that officials will be obliged to protect commercially confidential information they obtain from overseas businesses. The law will make it illegal for officials to misuse critical information or to provide it to local firms.
