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China unveils first regulation on improving business environment

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President Xi Jinping
President Xi Jinping

China treats all domestic and foreign enterprises equally, and welcomes companies from around the world to expand trade and investment for mutual benefit and win-win results, said an official from the country’s top economic planner.

Ning Jizhe, deputy head of the National Development and Reform Commission, made the remarks while elaborating on the country’s first regulation on optimizing business environment at a news conference held by the State Council Information Office on October 23.

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What’s special about the regulation? What does it mean for companies in China?

The regulation establishes basic institutional norms in business environment that give equal treatment to domestic and foreign enterprises, and specifies the principles and directions for fostering a stable, fair, transparent and predictable business environment.

It generalizes and outlines rules on optimizing business environment. The regulation does not include rules for management of specific industries and fields. Meanwhile, it leaves plenty of room for government departments at different levels to explore suitable measures to improve business environment.

China sees an improving business environment in recent years. It has slashed the number of items subject to administrative approval and lowered the threshold of market access.

Starting this year, the country reduced the items on the negative lists for foreign investment market access in pilot Free Trade Zones and the rest of the country, and rolled out 11 measures to boost opening up of the service industry, manufacturing and mining.

Through simplifying approval procedures, country has improved the efficiency for establishing a business, application and installation for water and electricity facilities and real estate registration by more than 50 percent.

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The country has further cut taxes and fees, significantly reducing corporate burden. It has also made marked progress in intellectual property rights (IPR) protection.

In the first half of the year, Chinese courts at all levels concluded more than 150,000 cases related to IPR of first instance, an increase of 80 percent year on year, and more than 2,000 criminal cases concerning IPR of first instance, 23 percent more than the same period last year.

The regulation, which institutionalizes the requirements in building a new system of open economy from all aspects and underscores opening up, provides a legal support for the country to ease market access and better develop an open economy at a higher level.

The country will take efforts to build a market-oriented and international business environment which is based on the rule of law, treat all companies as equals, and actively promote foreign investment, according to the regulation.

The country also pledges to give equal treatment to Chinese and foreign companies in terms of IPR protection and protect trade secrets. It holds zero tolerance on forced technology transfer and will punish any violations through legal channels.

The regulation stipulates that the state shall provide an open market for fair competition and ensure all market entities can make equal use of all factors of production. Meanwhile, it also stipulates that all market entities should abide by prevailing international rules while carrying out economic and trade activities in China.

These rules put a greater emphasis on protecting legitimate rights and interests of foreign companies, Ning pointed out.

He disclosed that the country will unveil a set of policy measures on IPR protection.

China will set up standards on identifying patent, trademark and copyright infringements, strengthen campaign against IPR violations and impose heavy penalties on all types of breaches.

Meanwhile, the country will advance the process of revising the Patent Law, the Copyright Law, the new round of comprehensive revision of the Trademark Law, the revision of the Implementing Regulations of the Patent Law, and the revision of the regulation on the protection of new varieties of plants.

It will also set up a punitive damage system for infringements on intellectual property.

The country will improve services and speed up construction of a patent review system and a trademark registration system. It plans to cut the review period of high-value patents to 17.5 months and shorten the trademark review period to 5 months by the end of the year.


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