• Mobile version
  • Follow us on Wechat
  • Facebook
  • Twitter
  • Instagram
  • YouTube

China betters legal environment for both foreign and domestic companies: US legal expert

The work reports of the Supreme People’s court (SPC) and the Supreme People's Procuratorate (SPP) were delivered on March 7 at the ongoing session of the 14th National People’s Congress.

“I’m really impressed by getting through the work reports. Notwithstanding undergoing incredible criticism internationally, which I don’t understand, China remains true to its path. Hopefully, some people and countries will take notice and stop behaving in such a belligerent way,” said Donald Lewis, adjunct professor with the Center for Business Studies and Innovation in Asia-Pacific of the University of San Francisco, in an exclusive interview with GDToday on March 8.

IP rights protection enhanced to encourage innovation

Lewis noted that the work reports highlighted Chinese judiciary’s efforts to better the legal environment for business, especially through the strengthened protection of intellectual property (IP) rights.

“China has established four IP courts respectively in Beijing, Shanghai, Guangzhou of Guangdong province, and the Hainan Free Trade Port, and has intensified IP protection of key technologies in emerging and major industries, such as 5G communications, new energies, new materials, and high-end equipment manufacturing,” he elaborated.

“Harsher punishments for IP infringements have been installed in order to facilitate innovation-driven development,” he said.

In 2022, the amount of compensation awarded in IP infringement cases rose by 153 percent compared with 2018, according to the SPC work report. Offices specializing in IP cases have been established in procuratorial agencies across 29 provincial regions. 13,000 offenders were prosecuted in 2022 over breaches of trademarks, patents, copyrights, and trade secrets, at a 51.2 percent rise from 2018.

“Chinese judicial authorities have also improved the capacity of the judicial system to handle cases involving foreign entities with a total of ten special courts established to handle international commercial disputes,” Lewis said.

China provides level playing field for foreign and domestic companies

Leiws believes China provided excellent guidance to foreign investors through a whole range of modern legislation. “For example, the original foreign investment laws involved sino-foreign joint ventures and wholly foreign-owned enterprises, but it is expanded beyond that base, and now we have the Foreign Investment Law of China as well as the Company Law,” Lewis illustrated.

In his view, these laws put both foreign-invested companies and domestic companies on a level playing field, abolishing the super-national treatment of foreign-invested companies.

“But that has not hindered investment from abroad, because there has been much greater liberalization in China. The country has opened up many more sectors to foreign investment, and allows for a wide range of forms of business associations,” Lewis furthered, “I hope countries and regions, such as the US and EU, will bear this in mind, because these are benefits to their citizens.”

Hong Kong, Macao to play a vital role in China's further opening up

Lewis noted that China has never stopped opening up. “China initiated many free trade agreements with many countries, as well as bilateral investment protection treaties. It has a track record where it is able to further liberalize, modernize and adopt international rules and standards.”

In 2021, China officially applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is a free trade agreement between 11 countries, including Australia, Canada, New Zealand, Singapore, and Vietnam. The members of CPTPP represent about 13.5 trillion USD in GDP, or 13.4 percent of global GDP, making it one of the world’s largest trade deals.

“China will be able to further liberalize and modernize through joining the CPTPP so that it can stand really shoulder to shoulder with the most developed economies in the world,” Lewis said.

He believes Hong Kong SAR and Macao SAR can play an important role in China’s further opening up because they provide ready-made legal systems that strongly support fully open market economies, and useful models for further economic transformation of the Chinese economy.

“I do believe that China can make the transition to more advanced standards and international rules. It has shown that by joining the World Trade Organization back in 2001. It’s come a long way,” Lewis said.

Reporter | Lydia Liu

Video editor | Zoey

Video Script | Lydia Liu

Poster designer | Lu Lu

Editor | Wing, Steven, Jasmine, Jerry

Related News