A bill signed by Premier Zhu Rongji revising three laws on foreign investment in China was presented to the top legislature Monday.
The revisions of the laws concerning Chinese-foreign joint ventures, Chinese-foreign cooperative ventures and solely foreign funded ventures in China are intended to "facilitate China's impending accession to the World Trade Organization," the bill said.
Shi Guangsheng, minister of foreign trade and economic cooperation, explained to the legislative session today that the limitations on foreign investors in terms of foreign exchange balance, priority of purchasing in China and selling products to overseas markets were deleted in the draft amendments.
The existing laws on China-foreign cooperative ventures and solely foreign funded ventures require such an enterprise to "maintain the balance of foreign exchange in expenditure and income by itself."
Such a requirement was canceled in the draft amendments, Shi explained.
In addition, foreign-funded and Chinese-foreign joint ventures may purchase raw materials, fuel and fittings in the Chinese market or in overseas market, replacing the stipulations that " priorities should be given to the Chinese market" in this aspect.
Solely foreign-funded enterprises in China are required by existing law to export all or most of their products, otherwise they must use high technologies and advanced equipment. Such wordings were rephrased as "the state encourages the founding of foreign-funded ventures whose products are export-oriented or with high technologies."
Chinese-foreign funded ventures and solely foreign-funded ventures would no longer have to report their production and execution plan to government departments, according to the new laws, which was compulsory in existing laws.
"These revisions were based on the pledges of the Chinese government, made during negotiations for China's accession to WTO, " Shi said.
China's foreign reserves and other economic factors also allow for this revisions, and some of the existing rules are not in line with market rules, he noted.