The foreign investments in China receive better protection thanks to the Rule of Law principle

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On March 2016 the National People’s Congress defined the guidelines of the country’s economic development until 2020, and opened a new phase that shall be based on sustainability, internal growth and innovation. The 13th Five-Years Plan symbolizes the shifting from an investment/export led growth to a domestic-led growth, from attention to quantity to attention to quality.

Amongst the main points of the document, there is the primary interest of the government to create a business environment based on the rule of law, needed to guarantee a fair, unified and efficient market. The rule of law principle was formally included in the Chinese constitution in 1999 at art. 5, when foreign investors asked for better protection of their economic interests in the country. But in practice the application of the principle had to pass through years of legislative and judicial efforts. A system born from the masses and based on the power of the masses speaking through the words and the authority of the Chinese Communist Party would have needed time before being replaced by the power and authority of the law over the Party. For these reasons, the Chinese President, in the new Five-Years Plan, wants to renovate his concrete commitment to enforce the rule of law, even by – to use his own words – “putting the power in the cage of regulations”, in order to limit the power of the Chinese officers. To this purpose, he also carried out an unprecedented anti-corruption campaign. In order to guarantee the autonomy and independence of the Chinese judges from any other authority, it has been settled a system to identify and record the government leaders that interfere with judicial cases, also providing criminal consequ07nces.

The purpose is to win the trust of the market participants, especially foreign and European operators, and provide them with legal certainty, guarantee of impartiality of the judicial system, its independence from political influences and therefore the security they demand to invest in China. A safe and fair legal and judicial system is an important step in the country legal growth, which will encourage the foreign investors to better trust the Chinese system and invest  in China with awareness.

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