ANNOUNCEMENT 02 Mar 2019

March 2nd, 2019 - The Chinese State Council announced it was removing some restrictions on foreign investment.

NUMBER OF INTERVENTIONS

2

  • 0 harmful
  • 0 neutral
  • 2 liberalising

SOURCE

PRC State Council, March 2nd, 2019. (中华人民共和国国务院令 第709号 国务院关于修改部分行政法规的决定)
http://www.gov.cn/zhengce/content/2019-03/18/content_5374723.htm

Inception date: 18 Mar 2019 | Removal date: open ended

FDI: Treatment and operations, nes

On March 2nd, 2019, the Chinese State Council penned Edict No.709 (hereafter, 'Announcement'), which changed some articles in existing regulations.

Among the changes, were some significant alterations to the Technology Import Export Regulations (TIER), a contested Chinese legal framework that had been cited in various international complaints against China, for example, the Section 301 Report on China's forced technology transfer regime from the United States (see related act).

The Announcement removed three restrictive clauses, namely:

  • Article 24(3) - the 'mandatory indemnification provision'. This required foreign technology proprietors to indemnify the Chinese party against infringement risk of third party IP rights.
  • Article 27 - this related to the ownership of licensed technology upgrades, which stated that any kind of upgrades to such technology automatically belonged to those making the upgrades - with no allowance for a contract to change this.
  • Article 29 - similar to Article 27 above, Article 29 proscribed any clause that puts restrictions on the technology licence holder from using any upgrades they have developed.

The Announcement was released shortly after the 'New Foreign Investment Law' (see related act), which was also widely seen as a response to international complaints.

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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Inception date: 18 Mar 2019 | Removal date: open ended

FDI: Entry and ownership rule

In March, 2019, the Chinese State Council released a series of amendments to some rules regarding foreign business in China in their Edict No.709 (hereafter, 'Announcement').

As well as various other changes, the Announcement also removed restrictions on foreign investments in the international shipping businesses in China.

The changes came into effect upon the Announcement's promulgation, i.e. March 18th, 2019.

 
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