The relationship between FDI regulations in China and the WTO

Since it adopted the open door policy in 1978, China has tried to attract FDI to modernise its economy in its own way, that is, 'a socialist market economy with Chinese characteristics'. FDI regime in China is delineated in major investment laws and their implementing regulations, featuring control over foreign investment and requirements. In acceding to the WTO, China needs to remove incentives by treating foreign investors equally with local investors under the national treatment principle. Certain requirements imposed on foreign investors will also have to be removed or modified in case they are not consistent with the provisions in the WTO regulations. On 15 November 1999 the bilateral negotiations between China and the United States were resolved in an agreement regarding China's entrance to the WTO. Therefore, China would have even lesser options than before and the process of transforming its regulations relating to FDI, consistent with WTO requirements, will be carefully watched.