The National People’s Congress ended and Chinese legislators endorsed a new foreign investment law designed to prevent forced intellectual property transfer and to protect foreign companies' commercial and trade secrets.
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This comes as Washington, D.C. and Beijing are still working on the final details of a trade agreement.
Former U.S. Ambassador to China Gary Locke told FOX Business’ Connell McShane that the new law is a step in the right direction.
“This is a good sign, it means they are stepping up, they know that they need to set in motion the protocols, the regulations, to enable that foreign investment,” he said on Friday.
Locke said removing the restrictions is a necessary step for foreign companies to invest in China.
“The issues of the trade deficit, buying more American-made products, creating more jobs in the America will have to be enforced,” he said. “The Chinese I understand, and according to the administration officials, are willing to make significant increases in purchases of American goods, and farm products, and even natural resources.” He added, “That’s going to lead to good jobs.”
However, he emphasized the key is to have reinforcement.
“So the Chinese know that if they relax, if they don’t follow through, then we have a mechanism by which we will take actions against them,” Locke said on “After The Bell.” Whether that’s keeping some of the tariffs in place until they completely follow through, or possibly re-imposing tariffs.”
With regard to Beijing’s promises of opening up markets, protecting intellectual property and increasing purchase of American products, Locke said, “We need to have commitments with timetables given to each of those actions.”
The former Ambassador also pointed out that a lot of the issues being discussed take time to address as China is still far behind.
“They are trying to model their court system after the American system,” he said. “So many of their judges right now aren’t even lawyers. That’s how far they have to go.”
Locke concluded that with regard to the China trade talks, “Enforcement, monitoring their progress is key.”