As we have written previously, China is engaging in simultaneous bilateral investment treaty (BIT) negotiations with the United States and the European Union. Indications are that the Chinese government is taking these negotiations very seriously. This presents the most significant opportunity for foreign investors in China to influence market access restrictions and other restraints on foreign investment in the country since China’s accession to the World Trade Organization (WTO) in 2001.

At the request of European trade negotiators, we searched hundreds of thousands of measures issued by 39 central government agencies and five representative provincial-level governments in order to identify provisions that frame or limit market access and business activities of foreign-owned companies in China. In the process, we identified over 800 restraining provisions, which we analyzed and grouped into a number of different types and categories. The results provide a useful taxonomy for future discussion both within the BIT negotiation context and beyond.

Beyond published measures, the Covington team reviewed key trade publications and conducted interviews with industry groups to identify and catalogue administrative practices that may also have a restraining effect on foreign investment. As foreign business leaders in China are well aware, many of the biggest obstacles to foreign participation in the Chinese economy are imposed unofficially by government officials exercising legal or extralegal discretion.

A public version of the report prepared for the EU’s Directorate General for Trade is available on the EU DG Trade website. While it does not include the full database of restraining measures, the public version presents detailed descriptions of the types of restraints identified and provides supporting examples and observations.

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Photo of Timothy P. Stratford Timothy P. Stratford

Tim Stratford is senior counsel and a member of the firm’s International Trade, Corporate, and Public Policy Practice Groups. He is also serving as Chairman Emeritus of the American Chamber of Commerce in the People’s Republic of China. Tim’s practice is focused on…

Tim Stratford is senior counsel and a member of the firm’s International Trade, Corporate, and Public Policy Practice Groups. He is also serving as Chairman Emeritus of the American Chamber of Commerce in the People’s Republic of China. Tim’s practice is focused on advising international clients doing business in China and assisting Chinese companies seeking to expand their businesses globally. Except for the five years he spent in Washington, DC as Assistant U.S. Trade Representative (2005-2010), Tim lived and worked continuously in the greater China region from 1982-2023, including for twelve years as managing partner of the firm’s Beijing office.

As Assistant USTR, Tim was responsible for developing and implementing U.S. trade policy toward mainland China, Taiwan, Hong Kong, Macao and Mongolia. He worked closely with other senior U.S. and Chinese officials from numerous government departments and agencies to address problems encountered by companies engaged in bilateral trade and investment and co-chaired a number of important bilateral working groups and dialogues established under the U.S.-China Joint Commission on Commerce and Trade and the U.S.-China Strategic & Economic Dialogue.

Prior to serving at USTR, Tim was General Counsel for General Motors’ China operations, where he was a member of GM’s senior management team in China and oversaw the company’s legal and trade policy work. Tim also served previously as Minister-Counselor for Commercial Affairs at the U.S. Embassy in Beijing and as three times as Chairman of the American Chamber of Commerce in China. He is a graduate of Harvard Law School and Brigham Young University, and is fluent in Mandarin and Cantonese.

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