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 Ashwin Kaja Ashwin Kaja

With over a decade of experience in China, Ashwin Kaja helps multinational companies, governments, and other clients understand and navigate the complex legal and policy landscape in the country. He plays a leading role in Covington’s China international trade and public policy practices…

With over a decade of experience in China, Ashwin Kaja helps multinational companies, governments, and other clients understand and navigate the complex legal and policy landscape in the country. He plays a leading role in Covington’s China international trade and public policy practices and, outside of Covington, serves as the General Counsel of the American Chamber of Commerce in China.

Ashwin helps clients solve acute problems that arise in the course of doing business in China and position themselves for longer-term success in the country’s rapidly evolving legal and policy environment. He is an expert on Chinese industrial policy and has worked on matters related to a wide range of sectors including technology, financial services, life sciences, and the social sector. Ashwin has also counseled a range of clients on data privacy and cybersecurity-related matters.

As the General Counsel of the American Chamber of Commerce in China (AmCham China), Ashwin serves as a senior officer of the organization and as an ex officio member of its Board of Governors, supporting nearly one thousand member companies in developing their businesses in China and advocating for their needs with China’s central and local governments.