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  • (game music)

  • - [Ksenia] China has never been an easy game

  • for foreign businesses to play.

  • Companies have complained about a tightly controlled market

  • and what they regard as protectionist regulations.

  • There have also been complaints about inadequate protection

  • of intellectual property, or IP

  • as well as forced transfers of know-how.

  • - China, which is a first world country now,

  • has to play by the rules.

  • We can't allow them to steal our technology.

  • - [Ksenia] Though Beijing denies

  • it forces companies to divulge secrets,

  • this has been one of the sticking points

  • during trade negotiations.

  • But recently--

  • (Xi speaks Chinese)

  • With hopes for a partial deal on the horizon,

  • Beijing has been playing nice,

  • emphasizing its message that it's working hard

  • to improve its business environment.

  • This is something foreign companies operating in China

  • have been eager to see,

  • but is this really going to change the game?

  • Starting next year, China pledges to put overseas companies

  • on more equal footing with local players

  • with a new set of regulations.

  • In January, a new law governing foreign investment kicks in.

  • It promises to do more

  • to protect overseas companies' technology and know-how.

  • - Foreign investment,

  • well, it does have a positive impact on US companies.

  • - [Ksenia] Jake Parker is a Senior Vice President

  • of the US-China Business Council,

  • a lobby group of some 200 American companies

  • that do business in China.

  • In October, the Council received a draft of the guidelines

  • on how the law will actually work.

  • In general, they liked what they saw.

  • Chinese officials will be banned

  • from forcing technology transfers.

  • The guidelines will also limit

  • the disclosure of trade secrets

  • from going through China's administrative review process.

  • - However, at least on IP, the draft does fall short

  • on specifying the types of disclosures

  • of trade secrets that will be prohibited

  • and clarifying the types of administrative groups

  • within China's government

  • to which provisions of technology transfer apply.

  • - [Ksenia] At the same time,

  • China is also rolling out regulations

  • that will open up its financial sector.

  • - The banks and all of the financial services companies

  • will be very, very happy with what we've been able to get.

  • - [Ksenia] Starting next year,

  • foreigners should be able to freely invest

  • in future securities and life insurance.

  • - The trick is to wait and see

  • if these implementations and liberalizations

  • lead to specific licenses for member companies

  • and there's always a disconnect

  • between an opening of a sector

  • and a company being able to operate there.

  • - [Ksenia] These steps won't only level the playing field

  • for foreign and domestic companies

  • but could also end up helping China achieve

  • its own development goals.

  • Beijing wants to hit a target of doubling its GDP

  • between 2010 and 2020.

  • That will not be an easy task with economic growth cooling

  • and a trade war stretching deep into a second year.

  • - Foreign investment remains an important mix

  • in China's economic system

  • and they would like to ensure that foreign companies

  • continue to invest there.

  • - [Ksenia] While the new investment law is welcome,

  • analysts say these new business regulations

  • don't mean a shift away from China's direct investment

  • in its domestic companies

  • or looser control of its planned economic goals.

  • In late October, China set up a state backed fund

  • for its semi-conductor industry.

  • The war chest is around $29 billion.

  • That's about $9 billion bigger than a similar fund

  • that was raised in 2014.

  • That's part of an attempt by Beijing

  • to make its key industries more self sufficient

  • and competitive in the long run.

  • (Xi speaks Chinese)

  • China's new regulations promise a sweeping overhaul

  • of its older practices,

  • and this could affect corporate titans

  • as well as smaller businesses.

  • - China is going to focus on the economic reform priorities

  • that make sense for their own domestic economy

  • and in many ways, those align with some of priorities

  • of the foreign business community.

  • - [Ksenia] However, some companies are waiting to see

  • just how sincere Beijing is about opening up.

  • At least for now, the opening up is win-win for Beijing.

  • It extends a political olive branch to the US

  • during contentious trade talks,

  • while potentially bringing foreign money

  • and expertise into its economy.

  • (upbeat music)

(game music)

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