Foreign business chambers and associations will be allowed to report issues related to the investment environment to Chinese authorities under a new grievance mechanism that will be effective on October 1, the Ministry of Commerce (MOFCOM) said. Foreign investors who are yet to set up entities in China but have made commitments to the market will be eligible to file complaints as well. The new complaint handling mechanism tailored for foreign investors will replace interim measures to deal with foreign investors’ complaints that have been in place since 2006. The Ministry started revising the interim rules in November 2019, and it released draft rules for the new grievance mechanism in March. The period for public comments ended in late April.

The announcement of the new mechanism amid the Covid-19 pandemic, the rise of unilateralism and protectionism, and the resurgence of anti-globalization is a pivotal move to stabilize foreign investors’ expectations, Zong Changqing, Director of the Department of Foreign Investment Administration at MOFCOM, told reporters. It also signifies China’s long-standing pledge to improve the protection of the legitimate rights of foreign businesses and continue its open-door policy, he added. China’s actual foreign investment in U.S. dollar terms shrank 2.3% year-on-year to USD76.98 billion in the first seven months. The new mechanism aims to resolve foreign investors’ complaints, said Bai Ming, Deputy Director of the International Market Research Institute at the Chinese Academy of International Trade and Economic Cooperation, a think tank under MOFCOM. “Foreign investors will be able to rely on the new mechanism, which is supposed to complement the new Foreign Investment Law, to have their complaints and grievances heard and handled, thereby enabling worry-free investing,” Bai told the Global Times. The new Foreign Investment Law came into force on January 1.

The Ministry received 454 suggestions from international organizations, business chambers and associations, foreign-invested firms, local complaint channels, experts and scholars, Zong disclosed. The final version of the new mechanism has taken into account a variety of concerns raised by these parties. Including prospective foreign investors in the new mechanism and adding a clause that allows business chambers and associations to file complaints regarding the investment environment are moves taken in response to advice from multiple institutions, including the American Chamber of Commerce in China (AmCham China), according to Zong. The new grievance mechanism forbids any clampdown on those filing complaints and shortens the deadline of resolving unsettled complaints to one year from the previous two years, the Global Times reports.

The rule consists of five chapters and 33 articles, further refining the requirements of the Foreign Investment Law and its implementing regulations and updating and optimizing of its system for handling foreign companies’ complaints, the China Daily adds. The regulation is meant to implement article 26 of China’s Foreign Investment Law, which provides that the state establishes working mechanisms for complaints by foreign-invested companies, promptly handles the issues raised by them or their investors and coordinates and improves policy measures in question, said Zong Changqing, Director General of the Ministry’s Department of Foreign Investment Administration. He said the rule has broadened the scope of complaints that can be made by foreign companies. It has clarified that global companies can apply to agencies that handle complaints for coordination and settlement of their legal rights and interests that may be infringed by administrative actions. The companies also can report to the government units that they are having problems with in running their business. In addition to global companies’ right to suggest the government improve relevant policies and measures, foreign chambers of commerce can also report issues concerning China’s investment environment to authorities that handle complaints.