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China will implement a new rule for handling the complaints of
foreign-invested enterprises on Oct 1, as part of its efforts to build a
market-oriented and law-based international business environment, the
Ministry of Commerce said on Monday. The rule consists of five chapters and 33 articles, further refining
the requirements of the Foreign Investment Law and its implementing
regulations and updating and optimizing of its system for handling
foreign companies' complaints. The regulation is meant to implement article 26 of China's Foreign
Investment Law, which provides that the State establishes working
mechanisms for complaints by foreign-invested companies, promptly
handles the issues raised by them or their investors and coordinates and
improves policy measures in question, said Zong Changqing,
director-general of the ministry's Department of Foreign Investment
Administration. He said the rule has broadened the scope of complaints that can be
made by foreign companies. It has clarified that global companies can
apply to agencies that handle complaints for coordination and settlement
of their legal rights and interests that may be infringed by
administrative actions. The companies also can report to the government
units that they are having problems in running their business. In addition to global companies' right to suggest the government
improve relevant policies and measures, foreign chambers of commerce can
also report issues concerning China's investment environment to
authorities that handle complaints. Actively promoting foreign investment and consolidating the
protection of the legal rights and interests of foreign investment are
the biggest highlights of the Foreign Investment Law and related rules,
said Jiang Chenghua, deputy director-general of the ministry's
Department of Treaty and Law. The laws and regulations stipulate various substantive rights of
foreign investors and strengthen the nation's legal system to ensure
fair competition between domestic and foreign companies, he said. Global firms also should apply policy measures introduced by the
government to support their business growth in accordance with the law,
and participate fairly in the setting of industrial standards and
government procurement activities, said Li Yong, deputy director-general
of the China Investment Promotion Agency. In terms of protecting intellectual property, penalties for
infringement have been reinforced, government branches are prohibited
from using administrative means to forcibly transfer technology and
protection of commercial confidential information has been enhanced, he
said. The rule has helped in setting up a working group coordinated by the
Ministry of Commerce and related government branches to handle foreign
businesses' complaints. The local governments at or above the county
level must designate departments or agencies to handle complaints. To protect the legitimate rights of foreign firms and create a
stable, fair and transparent business environment, the ministry released
a draft for public comment of rules for foreign investment complaints
in March. The draft rules updated regulations issued by China in 2006. The implementation and enforcement of the new Foreign Investment Law
and related rules will further level the playing field and strengthen
multinational companies' confidence in investing in China in the long
term, said Connell Zhang, executive vice-president of Ecolab, the United
States-based health and hygiene giant. "China is further opening up its market to foreign investors by
lifting entry barriers. We hope the expanded pilot program, laws and
rules will further promote cross-border investment in transportation,
education, healthcare, finance and professional services," said Gavin
Guo, international partner of the Shanghai-based Kewei Law Firm. Many cities and regions have also promulgated detailed policies and
measures to attract and facilitate foreign investment, he said, adding
the expanded China (Shanghai) Pilot Free Trade Zone has continued to
demonstrate flexibility and innovation in regulating foreign investment.
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