Worries over investment law unnecessary

Some Hong Kong-based business people have expressed concern over the new Foreign Investment Law, which was approved by the National People’s Congress at its annual session in Beijing earlier this month. Interestingly, what worries them is not any provision in the law that deals specifically with investments by Hong Kong businesses, but rather the contrary — it does not mention Hong Kong at all throughout. Apart from the obvious that they are not seen or treated as “foreign investors”, the Foreign Investment Law seems to have made some members of the business community here feel left out. Such sentiments are understandable but unnecessary, because there are other legally binding safeguards to protect Hong Kong businesses’ interests on the mainland.

The Foreign Investment Law is widely considered to be the ultimate answer to concerns over legal protection for foreign investment at the national level, or the lack of it. That is why some Hong Kong-based businesses felt neglected somehow when they found out the new law is not for them. However, that’s because they forgot that Hong Kong businesses are already covered by many favorable policies and rules, such as the Closer Economic Partnership Arrangement, known as CEPA. The Foreign Investment Law will not replace any of those existing safeguards until the central authorities say otherwise. As a matter of fact, Premier Li Keqiang addressed the above-mentioned concerns after the NPC session by saying to the effect that the new law is actually a blessing for Hong Kong, and will serve as a reference code in legal matters concerning investments by Hong Kong businesses and residents when necessary.

Wang Zhimin, director of the Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region, pointed out at a meeting here on Wednesday that the CEPA between the central government and the HKSAR will remain effective and renewed every year as it has been since 2003. Like the Individual Visit Scheme introduced the same year, CEPA is designed to help Hong Kong recover faster from the devastating impact of the SARS epidemic, and has been instrumental in shoring up Hong Kong’s economy against the global financial crisis of 2008 till this day. Besides, the central government has promised measures to institutionalize national treatment for permanent residents of Hong Kong and Macao in a gradual and orderly fashion.

The Foreign Investment Law is a concrete step in China’s development strategy through continued reform and opening-up. Hong Kong has played a unique and irreplaceable role in the reform and opening-up campaign and benefited from it tremendously since it started in 1978. There’s no reason whatsoever to question Hong Kong’s status or role in national development moving forward.