China loosens investment rules for foreign firms

Politicians in China have passed a new law loosening regulation on foreign investment, in what is being seen by market watchers as a move to appease Washington in the country’s ongoing trade war with the United States.

Delegates at the country’s annual National People’s Congress voted for the new law by a landslide, with 2,929 votes in favour, eight against the law change, and eight delegates abstaining.

The new law was attempting to help level the rulebook between domestic firms and foreign investors in the country.

It was introduced and passed by the congress three months after the first draft was presented - a rapid journey for a new law in China, giving rise to the belief that it was indeed tied to ongoing trade negotiations with the US.

There was some criticism of the law change, however, with the American Chamber of Commerce calling some of the provisions “quite general”.

“[The changes] do not address a number of the persistent concerns of foreign companies or foreign-invested enterprises in China,” it said in its statement.

Still, the lobby group welcomed the effort from Chinese legislators to improve the foreign investment climate in the world’s second-largest economy.

The new law will take effect on 1 January 2020.

Both Beijing and Washington are still working towards a trade agreement after a year in which they were locked in a tit-for-tat exchange of punitive tariffs.

The White House extended an olive branch of its own last month, lifting a 1 March deadline it had earlier imposed on reaching a deal with China.

Had the two parties not reached agreement by that date, the US had prepared a fresh round of tariffs on Chinese goods, before president Donald Trump confirmed he was pushing back the deadline.