China's top think tank proposed setting up a centralized foreign investment regulator to simplify the procedures allowing foreign capital entry into the country.
The existing foreign investment registration and regulatory framework, which consists of multiple government organs, is outdated, according to the Chinese Academy of Social Sciences (CASS) research group who authored the Blue Paper on the Rule of Law for 2017, as reported by financial news site yicai.
The paper says China has built a relatively complete system of laws and regulatory framework concerning foreign investment.
In opening up further and reorienting from an industrial economy towards a service economy, China is also exploring new modes of managing foreign capital’s entry. It has, for instance, set up several pilot free trade zones, where the mode of “pre-entry national treatment + negative list + registration” is used.
However, the existing laws and regulations on foreign investment, mostly formulated in the early days of Reform and Opening-up in the 1980s, fall short of the current needs.
The new management system does not connect smoothly with the existing regulatory framework. For instance, it is a big challenge to detect false information submitted by foreign-funded enterprises.
In response, the research group proposed that a fundamental Foreign Investment Law should be rolled out and existing laws and regulations should be revised accordingly.
Equally important, the blue paper argued, is that coordination among regulatory institutions should be strengthened. “It is necessary to...build a centralized foreign investment regulator,” it said.
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