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China releases details of new law on foreign investment ahead of trade talks with US

  • Beijing pledges equal treatment and intellectual property protection for overseas firms in China in full text of draft legislation
  • Mandatory technology transfers will be banned and tech cooperation based on voluntary principles and commercial rules encouraged

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An employee checks robots used for customer service at a factory in eastern China. The draft law encourages tech cooperation based on voluntary principles and commercial rules. Photo: AFP
Wendy Wuin BeijingandKeegan Elmerin Beijing

Beijing has vowed to ensure equal treatment and intellectual property protection for overseas firms operating in China, according to the full text of its draft foreign investment law – its latest move to address long-standing complaints.

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The draft law includes a widely anticipated ban on mandatory technology transfers from foreign companies and encourages tech cooperation based on voluntary principles and commercial rules in a bid to tackle a key issue in the ongoing trade war with the United States.

Government intervention in the normal business operations of foreign companies is also prohibited under the draft law, and authorities are banned from illegally setting up the conditions for foreign businesses to access or exit the Chinese market.

The full text of the new legislation was released for public consultation on Wednesday until February 24, ahead of planned face-to-face trade talks between Beijing and Washington next month.

It also states that China can take corresponding measures if it encounters discriminatory treatment on investment overseas, and foreign investment that could have an impact on national security would be subject to increased scrutiny.

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