Development of Sino-foreign enterprises will gain a boost with some of the legal restrictions governing their operations in China about to be shrugged off by lawmakers in the on-going Fourth Session of the Ninth National People's Congress (NPC).
Draft amendments to the Law on Chinese-Foreign Equity Joint Ventures were submitted yesterday to the Fourth Session of the Ninth NPC for final debate and approval.
The amendments aim at abolishing stipulations that require Sino-foreign joint ventures to give priority to the purchase of Chinese-made raw materials and to report their production plans to the departments concerned.
According to Gu Angran, director of the Legislative Affairs Commission of the NPC Standing Committee, the amendments will allow joint ventures greater leeway in making decisions about procurement by making it easier for them to purchase raw-materials from both domestic and overseas providers.
Despite consisting of only a short revision in content, the amendment is seen as a milestone in the country's quest to provide a legal framework that will better serve the development of joint ventures in China, regarded by many as one of the most profitable markets in the world.
Experts said the amendment reflects China's confidence in its opening-up process because it helps create a legal framework that conforms to international rules.
Amendment of the law is also believed to be a prerequisite for the further revision of Chinese laws and regulations that fail to meet international standards, something China will need to accomplish immediately after becoming a member of the World Trade Organization.
Gu told lawmakers yesterday that the amendment is a move to make the country's laws consistent with principles of a market-oriented economy and compatible with its impending accession to the World Trade Organization.
Gu said the old stipulation, which was made in late 1970s when China began to open its door to the outside world, was a move taken to ensure the stability of the country's investment environment. "But it is no longer needed today as the opening-up policy has become such a long-standing reality."
The law was formally released in July 1979, when China instituted the opening-up policy.
(China Daily 03/10/2001)