China has introduced some legal reforms for foreign businesses. Foreign trade expert Harry Broadman explains the advantages for countries in facilitating foreign investments, he tells at the Elevenmyanmar. Reforms can be potential engines of growth, he adds.
Some key principles highlighted by the new law are: intellectual property rights of foreign businesses are deemed to be protected in the same way as the local firms; foreign investors can freely remit profits, capital gains and liquidation proceeds to their overseas entities, in renminbi or in foreign currency; and foreign investors should be equivalently treated as the Chinese companies (that is, they will enjoy the “national treatment”).
“One of the key objectives of countries putting in place policies to encourage foreign investment is to lower barriers to business entry in order to stimulate domestic competition, provide local consumers with new products or services, expand employment opportunities and foster innovation－all of which are engines of growth,” said Harry Broadman, managing director and chair of the emerging markets practice at the Berkeley Research Group and a member of the Johns Hopkins Faculty.
This new Foreign Investment Law, and its corresponding regulations that are implemented, mark one of the most significant developments in China’s treatment of foreign investment, experts said.
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