According to the Guangdong Economic and Trade Office in the UK, Chinese government has today published a draft (in Chinese) “China Foreign Investment Act” for public consultation.

The new law will streamline and simplify the requirements and procedures of foreign companies investing in China, effectively granting foreign firm the much sought-after ‘domestic status’ except those under clear designated “control measures” — either restricted or prohibited, or on a clearly defined “negative list”. The old practice of seeking government approval before registering a joint-venture or a wholly foreign owned enterprise will be the things of the past once the new law is passed.

Once implemented, the three major existing laws on regulating foreign investment registration and operations will be replaced by this single Act. Detailed annual reporting of business operations will fall within the remit of the Company Act.

This will significantly reduce the complicated procedures for British companies and organisations hoping to set up and have a presence in China, especially for British SMEs.

As reported by BCC LinkToChina twitter this month, Guangdong Province has been proved to set up multi-locations Free Trade Area covering more than 100 km square and including parts of Guangzhou (Canton), Shenzhen and Zhuhai. the FTA will be piloting and testing ground for many newer open door policies designed to speed-heading development of emerging sectors and new growth sectors.