Chinese legislature approves possible olive branch to US

Li Jiabao

Li Jiabao

The legislation aims to address long-running grievances from foreign firms, including stronger protections for intellectual property, but the United States and European chambers of commerce voiced concerns that they were not given enough time to provide their input.

They endorsed a foreign investment law in the Chinese parliament aimed at appeasing the concerns of trading partners in Washington and elsewhere. The version approved by the National People's Congress wasn't immediately released.

These issues have been a sticking point in US-China (SPY) (FXI) trade talks. Foreign critics, quick to stress the Law's lack of specificity, should appreciate China's commitment and process.

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The draft Law consists of 41 articles in six sections, stressing investment promotion, protection, management, and legal responsibility. Thus, there seems ample room for the Law's "flexible application" in the hands of bureaucrats, especially interest-group bureaucrats. Much is riding on the Foreign Investment Law. Analysts believe that since the law has been rushed through in vague terms, mainly to get a trade deal done, its enforcement could become an issue.

US President Donald Trump on Thursday said that the negotiations should wrap up within four weeks, adding: "We are getting what we have to get". There is no shortage of reasons why companies might be feeling reluctant to invest right now. Apple (AAPL) and NVIDIA (NVDA) have warned that China's slowdown is hurting their earnings, and Advanced Micro Devices (AMD), Micron (MU), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOG) have also been impacted by the world's two largest economies' trade issues.

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