China's new foreign investment law: Stop, start

Author: John Crabb, Karry Lai, Jimmie Franklin | Published: 10 Mar 2020

W

hen China's new foreign investment law was first drafted back in 2015, the excitement was palpable. Foreign banks have long been able to operate in China, but most have struggled to gain ground over their domestic competitors. This hugely important legislation looked like that could finally change; that everyone could participate in the most remarkable growth story of this lifetime, if they wanted to.

Fast-forward five years and it's a very different story. The details of the law were not revealed until November 2019 – making feedback difficult, to say the least – and a series of unfortunate events, from rapidly-escalating trade tensions with the US to the coronavirus – have overshadowed the grand unveil on January 1.

"Few clients have been moving into mainland China, due in part to the local authorities taking up considerable management time and costs," says UK-based Akin Gump M&A and antitrust partner Davina Garrod.