China FDI consultation signals structural shift

Author: Ashley Lee | Published: 27 Jan 2015

Lawyers agree that China’s Ministry of Commerce’s (Mofcom) recent consultation on its foreign direct investment (FDI) regime is a game-changing reform that will facilitate foreign investment.

On January 19, Mofcom introduced far-reaching regulations that could change China’s foreign investment environment. While most have focussed on its variable interest entity (VIE) rules, the draft rules streamline China’s morass of foreign investment regulations.

In a speech following the consultation’s release Mofcom spokesman Sun Jiwen said that the previous laws had served China well. But change is needed. "With development and evolution of domestic and foreign situations, the existing three foreign investment laws, however, can hardly meet the requirements for further deepening the reform or opening up in an all round manner," he said.