Trade War with China

SteelBird said:

By the progress of the recent talks, I'm a bit pessimistic about the deal. Jack Ma has said that the trade war won't last just 20 days or 20 months, it will last at least 20 years. I feel that the tariff will be fixed at this point or goes a bit higher depends on what China is willing or not willing to concede. The trade war won't end easily.

Click to expand...

tidalwave said:

I can tell you are an avid KoolAid drinker.

Click to expand...

The BBC's Stephen McDonell said the Chinese government appears to have rushed through the investment law as an olive branch to the US amid trade war negotiations.

Many in the business community in China see this law as a kind of sweeping set of intentions rather than a specific, enforceable set of rules, he says. They fear it could be open to different and changing forms of interpretation.

Click to expand...

Broccoli said:

China foreign investment law: Bill aims to ease global concerns

Please, Log in or Register to view URLs content!

Click to expand...

China's newly passed foreign investment law will benefit foreign investors and companies, and will help improve the Asian country's business environment, experts said.

China's national legislature on Friday passed the foreign investment law at the closing meeting of its annual session. The law will become effective on Jan. 1, 2020.

Beijing will introduce a series of regulations and documents in accordance with the foreign investment law to better protect the legitimate rights and interests of foreign investors, Chinese Premier Li Keqiang told a press conference after the conclusion of the legislative session.

The new law clearly bodes well for foreign investors, especially in terms of market access and equal treatment, said Mario Ohoven, president of the German Association for Small and Medium-sized Businesses.

The law will help create much better conditions for foreign investors and help them plan long-term returns on investments in China, Ohoven told Xinhua.

"The new law promises more security for foreign companies investing in China," Ohoven said, while urging German companies to take advantage of the new opportunities for cooperating with Chinese partners.

Similarly, Sudheendra Kulkarni, an Indian expert on China, said the law should be welcomed by all since it shows Beijing's commitment to continuing with its policy of reform and opening-up with greater vigor.

At a time when protectionist sentiments are increasing, China's new law will reassure foreign investors, foster fair competition and create a transparent business environment for foreign firms, said Kulkarni, former chairman of Observer Research Foundation Mumbai, an Indian think tank.

China is making changes to strengthen foreign investment regulations, said Hans Hendrischke, a professor of Chinese business and management at the University of Sydney Business School.

Hendrischke said the Chinese government's approach shows that it has been listening to the concerns raised by business sector representatives, and is willing to introduce regulatory changes to improve the country's business environment.

"It's a very important piece of legislation that people have been waiting for for a long time because it will change the working environment for foreign investors in China -- and it will most likely have an impact on the way in which Chinese investors can work overseas," Hendrischke said.

"So economically speaking, business-wise, it's of global importance," Hendrischke added.

Click to expand...

Broccoli said:

China foreign investment law: Bill aims to ease global concerns

Please, Log in or Register to view URLs content!

Click to expand...

• Attempt by Beijing to address key issues raised by US President Donald Trump as part of the US-China trade war including forced technology transfer and market access
• Draft had received a lukewarm reception, but was approved by the vast majority of the National People’s Congress lawmakers on Friday in Beijing

China approved its new foreign investment law on Friday, sending the message that Beijing wants to level the playing field for overseas investors and reassure the global community it remains an attractive investment destination.

The final draft of foreign investment law was approved by 2929 National People’s Congress lawmakers in the Great Hall of the People, with eight opposing the measures and eight abstaining.

The new law will come into effect on January 1, 2020.

Beijing rushed the legislation through the country’s largely ceremonial legislature in an effort to fend off complaints from the United States and Europe about unfair trade practices. The new law was first introduced as a draft in 2015, but its progress picked up markedly from the middle of last year to address issues identified by Washington as part of the US-China trade war.

The law attempts to address outstanding concerns from foreign investors, such as unfair treatment in terms of market access and government procurement, forced technology transfer to Chinese partners and the theft of commercial secrets from foreign businesses in China.

It was amended this week to make it clear that officials will be obliged to protect commercially confidential information they obtain from overseas businesses. The law will make it illegal for officials to misuse critical information or to provide it to local firms.

At the same time, the wording of the law, which will replace three foreign capital laws – the Law on Sino-Foreign Equity Joint Ventures, the Law on Sino-Foreign Contractual Joint Ventures and the Law on Foreign-Capital Enterprises – passed between 1979 and 1990 in the early years of China’s process of reform and opening up, is quite general, leaving many details to be addressed in other regulations and implementation procedures.

“We’ve reviewed the final draft of the [law] and are pleased with the last-minute addition of new language to further protect foreign company commercial information and trade secrets,” said Jake Parker, vice-president of China operations at the US-China Business Council.

“The addition of language imposing criminal penalties for sharing sensitive foreign company information adopts a much tougher deterrent against counterfeiting and [intellectual property] theft and will offer new avenues for the enforcement of [intellectual property] protection. Enforcement will be the key metric for evaluating success, but the business community has collectively advocated for years for the Chinese government to impose criminal penalties for [intellectual property] infringement, we need to recognise this positive progress to that end.

“We hope that delaying the implementation of the law to January 1, 2020 will offer additional opportunities for foreign companies to work with regulators to resolve our concerns around [joint venture] contracts, national security reviews, and participation in standard setting bodies.”

The law had received a lukewarm response from some quarters, with the American Chamber of Commerce in China complaining about a

Please, Log in or Register to view URLs content!

“We are concerned that such an important and potentially far-reaching piece of legislation will be enacted without extensive consultation and input from industry stakeholders,” it said earlier this week.

The law does not specifically mention investment from

Please, Log in or Register to view URLs content!

but it will apply to and will not change the legal status of investments from Hong Kong, Macau and Taiwan – specifically, that they would still be considered “foreign” investments.
“It’s actually an improvement that there was a consultative period at all,” said Walker Wallace, managing partner of law firm O'Melveny's Shanghai office.

“I remember the days when it came out of a bureaucrat’s black box. Nobody had ever seen it before it came out, and everybody said it was totally impractical.”

He Weifang, an outspoken law professor at Peking University, questioned whether China’s existing government structure would be able to adequately enforce the new law.

“We need democratic supervision and justice to ensure enforcement if there are any regulations issued later. Enforcement really relies on structural changes and an independent judicial system. So, I cannot say that I will be more optimistic when more regulations come out,” he said.

“It would be even worse if we lack the implementation mechanism after we enact a law, because the outside world will not trust you no matter what law you enact in the future. We need checks and balances to ensure enforcement, otherwise, all well-intentioned enactment of laws will end in vain.”

Click to expand...

The United States and China will continue to compete and cooperate with each other, but they are not to decouple given their mutual dependence, said a renowned U.S. foreign policy expert.

"I don't think competition is avoidable. I think it's inevitable," said Robert Kagan, a senior fellow at Brookings Institution, a Washington-based think tank, in a recent interview with Xinhua.

The two countries have been in a competitive relationship for some time, both geopolitically and economically, and "now it's a little bit more out in the open," noted Kagan, who is also a well-established historian.

"But that ... is not frightening," he said.

What the two sides should focus on is how to properly manage their competition, suggested the expert, who has more than once been named by the Foreign Policy magazine as one of the "Top 100 Global Thinkers" over the past two decades.

"Competition is normal," he said. "It's a question of what form the competition takes and whether the competition spins out of control and leads to conflict."

Listing mutual dependence as a key feature of U.S.-China relations, Kagan dismissed the idea of Washington and Beijing "decoupling" with each other, an argument that has gained certain publicity in the past months.

"I don't expect them to decouple economically," he said, explaining that China is dependent on the American market, and Americans are "a little less dependent but nevertheless heavily dependent" on China -- not only its market but also its willingness to buy American Treasury bills and other things.

"There's always going to be a degree of mutual dependence," he stressed.

Given that, an intertwined relationship featuring both competition and cooperation will remain the keynote in future U.S.-China interactions, he said.

"It's always been the case that ... there's been a cooperative element and a competitive element, and I think probably that will continue to be the case," added the scholar.

On Washington's China policy, Kagan suggested that the United States should support China's success in economy and technology, where "there's of course room for both."

"The correct American policy toward China," he said, "should be to encourage China to succeed economically and to hope that China does succeed economically" and that the average Chinese people's living standard improves as well.

China is going to be an economic power in its region with or without America's support, he observed.

Meanwhile, Kagan stressed that while China's relative power is increasing and its gap with America is narrowing, the United States is still the strongest in the world.

"I don't think America is materially in decline," he said, pointing to its leading role in economy, military, technology and innovation.

But as regards Washington's desire to perform an international role, "I think that has declined tremendously," he said. "And that I think is unfortunate."

Click to expand...