WTO Mandated Legal Reform: China's Next Revolution

Pursuant to the Protocol of Accession (Protocol) that will form the basis upon which China enters the World Trade Organization (WTO), China will be obliged to overhaul a wide range of laws, regulations, policies and governmental practices. The draft Working Party Report, which upon finalization will constitute an integral part of the Protocol, sets forth a number of revolutionary legal reforms to be undertaken by China.

Foreign Investment

In response to obligations of member countries under the TRIMs Agreement, China has agreed to eliminate certain FIE performance requirements and to much fanfare has already taken action by amending the PRC Sino-foreign Equity Joint Venture Law (中华人民共和国中外合资经营企业法), the PRC Sino-foreign Cooperative Joint Venture Law (中华人民共和国中外合作经营企业法), and the PRC Wholly Foreign-owned Enterprise Law (中华人民共和国外资企业法)(WFOE Law) as well as the PRC, WFOE Law Implementing Rules in order to abolish the following requirements:

a) mandatory foreign exchange balancing;