The limitations on foreign investors in terms of foreign exchange balance and priority purchasing in China and selling products overseas have been deleted in the draft amendments to the new foreign investment law.

A bill signed by Premier Zhu Rongji, revising three laws on foreign investment in China, was presented to the top legislature yesterday.

Revisions on the laws concerning Chinese-foreign joint ventures, Chinese-foreign co-operative ventures and solely foreign funded ventures in China are intended to facilitate China's impending accession to the World Trade Organization (WTO) .

The amendments were welcomed by most legislators as a reflection of China's wish to improve the country's investment environment and boost foreign investors' confidence in China after its entrance into WTO.

Legislator Song Qingwei said he was pleased to see the country actively preparing to stand up to challenges and grasp the opportunities presented by the pending WTO membership.

According to the draft amendments, foreign funded and Chinese-foreign joint ventures may purchase raw materials, fuel and some fixtures and fittings in China and overseas, replacing the stipulation that "priority should be given to the Chinese market."

The State encourages the founding of foreign-funded ventures whose products are export-orientated or involved in the high-tech field, the amendments stated, instead of the current wording which says, "solely foreign-funded enterprises in China are required by existing laws to export all or most of their products, or failing that, must use high-tech and advanced equipment."

In addition, Chinese-foreign funded ventures and solely foreign-funded ventures will no longer have to report their product plans to government departments, said the amendment.

"It is time to revise laws and rules relating to foreign trade and economic cooperation and build up a transparent legal system," Song said.

However, problems also exist in the various laws and regulations concerning foreign investment.

"There are three different time limits on approval procedures for the establishment of foreign investment enterprises," said Song.

According to statistics, there are more than 1,300 national and local laws, regulations and agreements with WTO-related clauses.

Legislators have suggested revising them thoroughly as soon as possible in order to unify rules and standards on identical clauses.

The revisions have been based on pledges made by the Chinese Government, in negotiations for China's accession to the WTO.

China has signed bilateral deals with 36 of the 37 WTO members. Only Mexico does not have official dealings with China.

Focusing on the major theme of China's "develop the west" plans, legislator Yu Xinglong suggested that the amendments should encourage foreign investors to go to China's interior and western regions.

Legislator Zhang Dinghua pointed out that all Chinese-foreign funded joint ventures, Chinese-foreign co-operative ventures and solely foreign funded ventures should be required to sign a collective contract in order to better protect employees' rights on basic vacation, security and social insurance matters.

(China Daily October 27, 2000)