China: VIEs Alive and Well

• Author: Mark Schaub,David Hong,Atticus Zhao
• Published date: 04 March 2019
• Citation: jd0100
• Date: 04 March 2019
• Subject Matter: International Economic Law

2020/11/9 China: VIEs Alive and Well | China Law Insight

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CHINA LAW INSIGHT

China: VIEs Alive and Well

By King & Wood Mallesons on March 4, 2019

Author: Mark Schaub; David Hong; Atticus Zhao King&Wood Mallesons

Draft Foreign Investment Law Reboot

The latest Draft Foreign Investment Law will be discussed at the upcoming plenary

session of the National People’s Congress on 5 March, 2019. It has been over 4 years

since the original was released for public comment.

This new version has been much more warmly received than its predecessor as it

underscores the Chinese government’s intention to further open up its markets to foreign

businesses and also addresses issues raised by other countries, such as forced

technology transfers. There is no doubt a political backdrop to the revisions – a looming

trade war coupled with slowbalization (i.e. a retreat from globalization) means that China

has become a, perhaps unlikely, champion of trade and investment liberalization.

The key issues addressed in the draft law include prohibition against forcing technology

transfers; providing equal treatment and market access to foreign companies (except for

certain sectors specified on a negative list) but also reserving China’s right to retaliate

against companies from countries which discriminate against Chinese investors.

However, it is instructive that the very first article of this draft law articulates its intended

purpose to further open up the Chinese economy and actively boost foreign investment.