Ahead of an expected meeting later this month between the Chinese and American presidents, officials in Beijing are putting out the message that the country will keep opening up further to foreign investors.

Ning Jizhe, an economic planner in the National Development and Reform Commission, told reporters that an upcoming draft foreign investment law will spell out which industries will be opened to foreigners, as well as giving explicit protection to trade secrets.

“The new law clearly touches on the protection of the intellectual property rights of foreign investors and will forbid the use of administrative means to force technology transfers,” Ning said on Wednesday. “We will guarantee implementation of the law once it is passed.”

The law perhaps the key agenda item in this year’s congress will be presented and rubber-stamped at the National People’s Congress on Friday.

“It is the new foreign investment law due for approval at the Congress that we will be paying closest attention to,” said Jeremy Lawson, chief economist at fund management company Aberdeen Standard Investments. “If China chooses to take steps to ban forced technology transfers, ease joint venture requirements and reduce interference with foreign firms, it will be a nascent sign that policy is shifting in a more positive long-term direction.”

The law is expected to raise foreign investment limits for some sectors already partly opened, as well as providing incentives for multinationals to use China for production and research hubs. Ning named agriculture, mining and services as areas that will feature in the upcoming liberalisation.

Over the past year, China has declared electric vehicle production and insurance open to wholly owned foreign investment. In an annual work report submitted on Tuesday, the government said it would refine the system for conducting security reviews of foreign investments.

President Xi & President Trump
Photo: Chinese President Xi Jinping and US President Donald Trump met on the sidelines of the G20 summit in Argentina in December 2018.

The Trump administration has focused less on China’s foreign investment limits than its predecessors, as the president has been keener for U.S. companies to invest domestically. But intellectual property theft and forced tech transfers have been key complaints in the trade confrontation between Beijing and Washington.

Chinese officials have long denied that forced tech transfers take place. Yet for many foreign companies, tech transfers have been necessitated by China’s insistence that they form joint ventures with local companies as a condition of entry.

“On issues of financial opening up, China and the U.S. can absolutely reach an agreement,” Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, told reporters on Tuesday.

Mindful of the rising concerns of the U.S. and other foreign governments about inbound Chinese investment in recent years, officials in Beijing this week are signaling reforms in that area too.

Officials on Tuesday vowed to review overseas infrastructure investments under Xi’s flagship Belt and Road Initiative. Beijing has come under criticism for leading countries including Malaysia, Laos, the Maldives and Sri Lanka to take on potentially unsustainable debt to finance new projects. Malaysia has put some $20 billion of such projects on hold pending renegotiation talks with Beijing.

The report said: “We will address key problems such as those related to financial support, investment environments, risk management and security to ensure cooperation produces more results.”