New investment law on cards

Foreign investors will have to gain security clearance from the government for investments that are considered harmful to national security, according to a draft law made public on Monday, which among other things seeks to provide easier access to the Chinese market.

The draft foreign investment law, released by the Ministry of Commerce, stipulates that the State Council will set up a joint ministerial mechanism to carry out security reviews on foreign investment. Experts said the procedure is similar to the review system in foreign countries.

The draft says that foreign investors can apply for the review proactively if they feel that their investment threatens China's national security.