To promote the reform and opening up, and expand international economic cooperation and technical exchanges, China enacted Law on Chinese-Foreign Equity Joint Ventures, Law on Foreign-funded Enterprises and Law on Chinese-Foreign Cooperative Joint Ventures, with provisions on the investment conditions, procedures, operation, supervision, administration, and the protection of legitimate rights and interests of foreign investors in China. The state has established the principle that foreign investors should respect China’s sovereignty when investing in China and other principles, including the protection of investors’ legitimate rights and interests, equality and mutual benefit, extending of preferential policies and conforming to international prevailing norms, creating a favorable environment for foreign investors in China. To better implement the principles of equality and mutual benefit and conforming to international prevailing norms, China has made several amendments to the above three laws, and fully guarantees the legitimate rights and interests of foreign investors in their investment and commercial activities in China. By the end of 2010 China had approved the establishment of 710,747 foreign-funded enterprises with an actual investment of US$1.107858 trillion, which fully demonstrates the constant improvement of China’s legal system regarding the protection of foreign investors.

Administrative laws. Administrative laws are the collection of legal norms on the granting, execution and supervision of administrative power. They regulate the relationships between administrative authorities and subjects of administration because of administrative activities, follow the principles of statutory remit, statutory procedure, fairness and openness, and effective supervision, and guarantee the discharge of the functions and powers of administrative organs, as well as the rights of citizens, legal persons and other organizations. By the end of August 2011 China had enacted 79 administrative laws and a large number of administrative and local regulations regulating administrative power.

China attaches great importance to the regulation of the administrative organs’ execution of their power, strengthens the supervision of the execution of administrative power in accordance with the law, and ensures the correct execution of administrative power by administrative organs. China has formulated the Law on Administrative Penalties, established the basic principles of penalty by law, fairness and openness, corresponding penalty for offence and combination of penalty and education, standardized the enactment rights of administrative penalties, developed fairly complete procedures of the decision and execution of administrative penalties, and established the hearing system of administrative penalties, by which an administrative organ, before making a decision on administrative penalty that may have a significance influence on the production and life of the party concerned, shall notify the party the right to request a hearing. The state has promulgated the Administrative Reconsideration Law, established the self-correction mechanism within administrative organs, and provided remedies to citizens, legal persons and other organizations for the protection of their legitimate rights and interests. Under this law, about 80,000 cases of administrative dispute are handled each year. The state has enacted the Administrative Licensing Law, which regulates the institution, executive organs and procedures of administrative licensing, standardizes the system of administrative licensing, and, in order to reduce the number of administrative licensing, defines the matters involved in the application for administrative licensing. It also stipulates that administrative licensing will not be used for matters in which citizens, legal persons and other organizations can make decisions themselves, matters which can be effectively regulated by the competitive mechanism of the market, matters which the organizations of trades or intermediary bodies can manage through self-discipline, and matters which administrative departments can solve by other administrative means such as subsequent supervision. In order to thoroughly implement the Administrative Licensing Law, the 11th meeting of the Standing Committee of the 10th NPC passed nine amendments, removing 11 types of administrative licensing. The State Council canceled 1,749 matters of administrative licensing at the central level, changed the administrative method for 121 matters and transferred 46 matters to lower administrative levels. The state has promulgated the Administrative Coercion Law, which clearly defines the principles of the institution and execution of administrative enforcement, standardizes the types, statutory limits, executive bodies and procedures of administrative enforcement, providing a legal basis for the guarantee and supervision of the administrative organs’ performance of administrative functions and powers in accordance with the law, and the protection of the legitimate rights and interests of citizens, legal persons and other organizations.

China attaches great importance to the protection of the ecological environment for mankind’s survival and sustainable development. The state has promulgated the Environmental Protection Law, which lays down the basic principle of coordinated development of economic construction, social development and environmental protection, and dictates that governments at all levels, all organizations and individuals have the right and duty to protect the environment. To prevent negative impact on the environment in the course of project construction, the state has enacted the Law on Environmental Impact Assessment. The state has enacted laws for specific targets in environmental protection, such as those on prevention and control of water pollution, marine environment, atmospheric pollution, environmental noise pollution, environmental pollution by solid waste, radioactive pollution, and other laws. The State Council has formulated the Regulations on the Administration of Environmental Protection of Project Construction, Regulations on the Safe Management of Hazardous Chemicals, Regulations on the Collection and Use of Pollutant Discharge Fees, Measures on the Administration of Permits for Operations Involving Hazardous Waste, and other administrative regulations. The local people’s congresses, in the light of the specific local conditions in their respective areas, have drawn up a large number of local regulations on environmental protection. China has established a system of national environmental protection standards, and had implemented over 1,300 national environmental protection standards by the end of 2010. China is also constantly strengthening the administrative enforcement of environmental protection laws. Over the past five years the state has investigated over 80,000 cases of violation of environmental protection laws, and has closed down 7,293 offending operations in accordance with the law.

China has also enacted the Education Law, Compulsory Education Law, Higher Education Law, Vocational Education Law, Teachers Law, Regulations on the Administration of Kindergartens, Regulations on the Qualifications of Teachers, and Regulations on Chinese-Foreign Cooperation in Running Schools to establish and improve its national education system. It has enacted the Drug Administration Law, Law on Maternal and Infant Health Care, Blood Donation Law, Law on the Prevention and Treatment of Infectious Diseases, Law on Physical Culture and Sport, Frontier Health and Quarantine Law, Food Safety Law, Regulations on the Supervision and Administration of Medical Devices, Regulations on Traditional Chinese Medicine and Anti-Doping Regulations to establish and improve the medical health system to ensure the people’s health and safety. It has enacted the Law on Residents’ Identity Cards, Law on the Control of Frontier Exit and Entry of Citizens, Law on the Control of Guns, Fire Prevention Law, Law on the Control of Narcotics, Law on Public Security Penalties, Emergency Response Law, Regulations on Detention Centers, Regulations on Safety Management of Large-Scale Mass Activities, and Regulations on the Safety Administration of Fireworks and Firecrackers to establish and improve systems aimed at maintaining social order and stability, promoting social harmony and ensuring public security. China has enacted the Civil Servants Law, People’s Police Law, Law on Diplomatic Personnel, and Punishment Ordinance for Civil Servants Working in Administrative Organs to set up and improve the system of public service. China has enacted the National Defense Mobilization Law, Law on the Protection of Military Installations, Civil Air Defense Law, Military Service Law, Law on National Defense Education, Regulations on the Recruitment of Soldiers, and Militia Work Regulations to establish and improve the system of national defense and armed forces building. It has formulated the Law on Science and Technology Progress, Law on Popularization of Science and Technology, Law on the Protection of Cultural Relics, Law on the Intangible Cultural Heritage, Regulations on the Protection of Fossils, Regulations on the Protection of the Great Wall, and Regulations on the Administration of Films to establish and improve the system to promote scientific and technological progress, and protect and nourish culture.

Economic laws. Economic laws are a collection of laws and regulations which adjust social and economic relations arising from the state’s intervening in, managing and regulating economic activities for the society’s overall interests. They provide legal devices and an institutional framework for the state to conduct appropriate intervention in, and macro control of the market economy, thereby preventing malpractices resulting from spontaneous and blind operation of the market economy. By the end of August 2011 China had formulated 60 economic laws and a large number of related administrative and local regulations.

China has enacted the Budget Law, Price Law, and Law on the People’s Bank of China to exercise macro-control and management over economic activities. It has formulated the Law on Corporate Income Tax, Individual Income Tax Law, Law on Vehicle and Vessel Taxation, Law on the Administration of Tax Collection, Provisional Regulations on Value-Added Tax, Provisional Regulations on Business Tax, and Provisional Regulations on City Maintenance and Construction Tax to improve the taxation system. It has enacted the Law on Regulation and Supervision of the Banking Industry, and Law on Anti-Money Laundering to supervise and regulate the banking industry to ensure its safe operation. It has enacted the Agriculture Law, Seed Law, and Law on Agricultural Product Quality and Safety to guarantee agricultural development and food safety of the country. It has formulated the Railway Law, Highway Law, Civil Aviation Law, and Electric Power Law to supervise and administer key industries and promote their development. It has formulated the Land Administration Law, Forest Law, Water Law, and Mineral Resources Law to regulate the rational exploitation and utilization of important natural resources. It has enacted the Energy Conservation Law, Renewable Energy Law, Circular Economy Promotion Law, and Law on the Promotion of Clean Production to promote the effective utilization of energy and development of renewable energy.

China stresses the use of laws to safeguard fair and orderly competition among market players. The Anti-Unfair Competition Law is an important law formulated by China during its transition from the planned economy to the market economy. By drawing lessons from other countries, it makes provisions to forbid counterfeiting, commercial bribery, false publicity, infringement on trade secrets, unfair lottery-attached sales and vilifying competitors to safeguard the rights and interests of commercial operators and enable them to compete fairly and justly. The Price Law stipulates that the state institutes and gradually improves a mechanism under which prices are formed mainly by the market under the state’s macro-economic control. The prices of most commodities and services shall be regulated by the market while the prices of a very small number of commodities and services shall be guided or fixed by the government. The Anti-Monopoly Law has prohibitive provisions on monopolistic agreements, abuse of dominant market positions, and concentration of business operators that eliminates or restricts competition. China has carried out reforms to its fiscal, taxation, banking, foreign exchange and investment systems, establishing a macro-management system suited to the market economy. Remarkable achievements have been made in the deregulation of markets within the Chinese economy.