With the new law, China will be able to better protect foreign investors' legitimate rights and interests, and create a law-based business environment that is internationalized and enabling.
Linklaters analysis projects US$1.5 trillion of inbound investment into China over next ten years catalysed by new Foreign Investment Law. The law actively promotes foreign investment, protects the legitimate rights and interests of foreign investors, creates a law-based, worldwide and friendly business environment, and provides a legal bulwark for the new round of high-level opening-up.
Washington and Beijing have been locked in a tit-for-tat tariff battle as USA officials press China for an end to practices and policies they argue have given Chinese firms unfair advantages.
To consolidate information control, Xi's leadership also limited access by foreign journalists to ruling party and government officials during the opening of the latest parliamentary session.
A lot of US lobbying interests is trying to urge Trump not to rush having a "vague deal" with China, knowing it fails to "resolve fundamental complaints" about its "unfair competitive practices".
However, Parker added that "while the language on criminal liability is positive, it will be hard to enforce".
Many in the business community in China see this law as a kind of sweeping set of intentions rather than a specific, enforceable set of rules, he says.
In addition to the law's mandate of "equal treatment" of foreign and domestic companies, another notable element includes making nationwide the so-called negative list - which defines which industries or activities foreign businesses are able to operate in. The level of inbound M&A, which stood at a record US$56 billion in 2018, is projected to grow still further as the new Foreign Investment Law, signed on 15 March 2019, kicks in on 1 January 2020.
"We are concerned, however, that such an important and potentially far-reaching piece of legislation will be enacted without extensive consultation and input from industry stakeholders", it said.
It was unclear whether the measure would mollify U.S. President Donald Trump, who launched the tariff war by raising U.S. duties on Chinese imports in response to complaints Beijing steals or pressures companies to hand over technology.
"In actual practice, our goal is to generate the same amount of job opportunities as we did past year, which is over 13 million", Premier Li Keqiang told a press conference after the conclusion of the annual session of China's national legislature Friday.
It noted then that 19 percent of its companies were adjusting supply chains or seeking to source components and assembly outside of China as a result of tariffs.
"To want to artificially separate these two economies is unrealistic and impossible", Li said.