The New Chinese Foreign Investment Law and Its Implication on Foreign Investors

Meichen Liu | January 1, 2018

A major change in the regulation of foreign investment in China is underway. In 2015, the Ministry of Commerce issued the Draft Foreign Investment Law for public comment. If adopted, the new foreign investment law will replace the regulatory structure that has guided foreign investment in China for decades. The new law aims to further open the Chinese market and simplify the regulatory approval procedures for foreign investors. However, it will also limit foreign investment in restricted industries, which are still accessible to foreign investors through Varity Interest Entities under the current regulations. This note intends to examine the Draft Foreign Investment Law and analyze its impact on foreign investment in China.