Status Of HK Investments Won't Change: Beijing

The spokesman of Beijing’s top legislature has allayed concerns raised by some deputies about the proposed Foreign Investment Law, saying Hong Kong businesses on the mainland will continue to be treated as foreign investors.

Zhang Yesui was speaking ahead of the the National People’s Congress's annual plenary session which opens on Tuesday.

The proposed legislation is to be voted on by the NPC and is to replace the existing laws on foreign enterprises, with the aim to boost confidence and protect international business people.

But the draft bill does not specify that Hong Kong entities will be treated as "foreign investors", as they are under existing statutes. Some Hong Kong deputies to the congress had flagged this up.

Zhang said the proposed legislation is to address the concerns of international businesses on copyright and technology transfer issues, two areas at the core of the trade dispute between China and the US.

He said businesses from Hong Kong, Macau and Taiwan would enjoy the same benefits as before.

"Hong Kong and Macau SARs and the Taiwan region, first of all they are part of China. And at the same time they are also separate customs territories," he said. "Therefore investments from Hong Kong, Macau and Taiwan regions are unique in a way that they are neither foreign nor domestic investments."

"In practice they are managed with reference to foreign investments. With the new legislation in place, it does not change relevant legal applications," he said.

Zhang also slammed US officials for playing up the "so-called security risk associated with the products of certain Chinese companies" and linking this with China's national intelligence law. He said this is against WTO rules and is neither ethical nor fair.