BEIJING -- A draft law on foreign investment has been submitted to a bimonthly session of the National People's Congress (NPC) Standing Committee, which opened Sunday.

Once adopted, the unified law will replace three existing laws, namely the laws on Chinese-foreign equity joint ventures, non-equity joint ventures (or contractual joint ventures) and wholly foreign-owned enterprises.

The current laws can hardly catch up with the changing economic situation, as China strives to build new institutions and open its economy. But the new law will guarantee China's opening-up in the next phase and more effective utilization of foreign investment, analysts said.

Minister of Justice Fu Zhenghua said Sunday the foreign investment legislation is on the working agenda of the NPC Standing Committee.

Necessary mechanisms on the facilitation, protection and management of foreign investment are written into the draft law, such as the pre-establishment national treatment and negative list management, equal supportive policies, and equal participation in government procurement.

China adheres to its basic national policy of opening-up and welcomes foreign investment, the draft said.

China implements high-standard investment liberalization and facilitation policies, builds and improves foreign investment facilitation systems, and creates a stable, transparent and predictable environment, the draft said.

Local governments should rigorously fulfill their policy promises and all types of legal contracts with foreign-funded companies, the draft said, adding that, otherwise, foreign companies should be compensated for their losses.

At the end of November, a total of 950,000 foreign-funded companies became registered in China in line with current laws and brought in more than 2 trillion U.S. dollars, performing as a major driving force in China's economic and social development.