By implementing the umbrella policy of the World Trade Organization (WTO)supporting trade liberalization, signatories have entered into both bilateral and multilateralFree Trade Agreements (FTAs) to eliminate barriers to trade as much aspossible over time. The FTAs were later revised to include a clause of investmentliberalization to mitigate limitations towards foreign direct investment as well. However,the trend of investment liberalization has been applied by nations with certainreservations through national laws due to a limited ability to compete in terms ofcapital, labor, technology, and resource preservation, for instance. The majority ofthose nations fall within the group of developing and least developed countries. China,one of the most influential trade and investment partners at the global level, became aWTO signatory in 2001. As a result, it was mandated to amend certain obsolete tradeand investment policies to meet the liberalized investment policy of the WTO.Nonetheless, national laws significantly reflect to what extent the investmentliberalization policy is recognized by China. Considering applicable Chinese lawsgoverning foreign direct investment, China has aborted most obsolete laws, and hasbeen amending them to lessen restrictions on foreign investment and to establishcertain incentives for some businesses as well. Even though the amended laws retaincertain limitations, especially on ownership of the foreign investors, it can beanticipated that time is important for China to get ready for another step ofliberalization.