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China's New Proposed Foreign Investment Law—What to expect

On January 19, 2015, the Ministry of Commerce of China ("MOFCOM") released a draft PRC Foreign Investment Law (the "FIL") for public comment. Once adopted, the FIL would abolish the existing foreign investment laws with an aim of providing more clarity and transparency into China’s foreign investment regulatory regime. However, it remains to be seen how the FIL will interplay with other existing Chinese regulations, and the ultimate effect on foreign investment into China.

Despite the uncertainties, the draft FIL represents steps that the Chinese government is taking to reform its existing foreign investment regulatory framework. The FIL, once promulgated, will have profound impact on foreign investments in China. As details are considered and re-worked, multinationals will need to continue to monitor the FIL not only for new investments into China but also existing investments in China.

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