This book analyzes China's new foreign investment law which came into force in January 2020. The new law implemented sweeping changes and overhauled China’s foreign investment law regime of the last four decades. The foreign investment law aims to make the business environment more investor-friendly and address some of the contentious issues between US and China in the ongoing trade war. The book explains how the law enhances regulatory transparency. It also outlines the new approval process, that is the pre-establishment negative list system which has replaced the former approval system for foreign investment projects. The book also analyzes China's series of anti-sanction laws. This book will help give readers a better understanding of major changes and benefits under the new law and will be the first of its kind looking at the implications of this important law.
China has developed a piecemeal pattern of regulating foreign investment since the end of 1970s. The latest law is the Foreign Investment Law (FIL), which became effective on 1 January 2020. The groundbreaking new FIL is well acknowledged for its promises and affirmations pledged to investors, signalling China’s eagerness to improve its investment environment and regain momentum for investment growth. This book provides an updated and holistic understanding of the key features of the regulatory regime on foreign investment in China with critical analysis of laws and their implementation. It also examines sensitive and complex legal issues relevant to foreign investment beyond the 2020 FIL and new developments on foreign-related dispute settlement. The book uses cases of success and failure to illustrate the nuances and differences between law and practice regarding foreign investment. Considering China’s magnitude in the global economy and the weighty role of the regulatory system on foreign investment in China, this book is of great interest to a wide range of audience including academics in the field of investment law, legal practitioners, policymakers, and master's students in law and in management.
Prepared by the East Asian Institute, NUS, which promotes research on East Asian developments particularly the political, economic and social development of contemporary China (including Hong Kong and Taiwan), this series of research reports is intended for policy makers and readers who want to keep abreast of the latest developments in China. This volume summarises four features of the common principles of foreign investment laws in market economies and surveys four aspects of recent developments in Chinese foreign investment laws towards these principles.
This book focuses on an article-by-article interpretation of the Foreign Investment Law of the People's Republic of China, which was adopted on March 15, 2019. It also describes the legislative process of the law and the relationship between the law and other laws and regulations. It also includes a comparison of China's new foreign investment law with representative foreign investment regimes and the interaction between China and evolving international investment rules and the law, with a focus on the impact of evolving international investment rules on the development of China's foreign investment regime. In recent years, the momentum of globalization has continued to grow, and a pattern of economic governance with valorization, regionalization, and benefit sharing has gradually emerged. Amid the emergence of new international investment rules, the Foreign Investment Law of the People's Republic of China, adopted on March 15, 2019, has significantly changed the face of China's foreign investment regime. Given that China is a major destination for global foreign direct investment flows, its foreign investment regime is a focus of attention for international investors and international lawyers. This book aims to provide a practical legal guide for students of Chinese law, especially Chinese business law, practitioners, and their clients interested in the Chinese market, and observers of international investment law and national investment law practice.
On January 19, 2015, China's Ministry of Commerce released a Draft proposal for a new Foreign Investment Law in order to solicit opinions from the public. This new law, which if promulgated will replace the existing laws governing foreign investments, will reduce restrictions on foreign investment and streamline the approval process for foreign investment. However, the law also constitutes a crackdown on foreign investment in sensitive sectors. Most notably, the law will bring the variable interest corporate structure within the definition of foreign investment, and therefore within the ambit of regulation. This structure has been widely used by foreign investors to circumvent restrictions and prohibitions imposed on foreign investment in China. Many of the largest Chinese companies listed on U.S. exchanges are operating in China through a variable interest entity. Their standing under the new law is therefore of paramount importance.Unfortunately, the proposed law does not provide much clarity regarding how existing and new variable interest entities will be treated. Instead, the Draft maintains a broad and flexible approach that has informed the last 30 years of economic transition in China. This approach allows Chinese regulators to engage in selective enforcement, and has therefore been a popular policy choice of the Communist Party of China in it's desire to enjoy the benefits of a market economy, while maintaining tight control. However, it also leaves many questions unanswered and issues unresolved and reduces legal certainty.It is therefore important to develop a more comprehensive understanding of how the FIL fits with the overall objectives of the Communist Party of China, which can provide some indication as to how these unresolved issues may be addressed. Examining the proposed law in its larger context, as a step in China's economic transition, it becomes clear that ultimately Beijing adopts a cautious approach to foreign investment. The Draft, if enacted in its current form is neither a death sentence nor a thumb of approval for the VIE corporate structure. Instead, its provisions are broad enough that the impact of the law will depend upon their interpretation by authorities and courts.
This book provides an updated and holistic understanding of the key features of the regulatory regime on foreign investment in China with critical analysis of laws and their implementation.
Pre-establishment national treatment with a negative list is gradually becoming the “new normal” in Chinese international investment law. The history of China's approach to national treatment in Chinese international investment agreements (IIAs) can be divided into three stages: First, China's almost complete rejection of national treatment in the 1980s and 1990s; second, its conditional acknowledgment of post-establishment national treatment from 2000-2013; and third, its adoption of pre-establishment national treatment with a negative list after 2013. Each of the stages accords with China's internal investment development, as well as its role in the international economy. The recent shift towards pre-establishment national treatment is reflected in both China's domestic investment system reform and its evolving approach to IIAs: Namely, that China is adapting to prevailing international investment law standards. This shift is having a profound influence on China's legislative and administrative reforms. Ultimately, the implied liberal doctrine may bring both cooperative opportunities and challenges for both China and its investment and trade partners.
"This book offers a dynamic introduction to the new developments on national security review of foreign direct investment (FDI) from the perspectives of both domestic law and international investment law. COVID-19 and the Russian invasion of Ukraine have intensified FDI screening to an unprecedented scale, yet its purposes, scope, and potential impact remain ambiguous and controversial. The work first attests the legitimacy of FDI screening by using national security constitutional theory. Part I explicates the national security, public order and public health exceptions clauses in international investment law, and the novel EU Regulation on FDI screening. Part II provides an in-depth analysis of FDI screening in China, France, Germany, Italy, the Netherlands, Poland, and the UK, which have either witnessed momentous changes in domestic law recently, or have adopted new laws to cope with the growing security concerns. The book illustrates how States and the EU are using legal instruments to tackle exigent and emerging challenges and the complexity of national security emanated from foreign investment, in the context of evolving disruptive digital technologies and the structural change of the global economy. The volume will be of great value to a wide range of audiences including academics in investment and trade law, legal practitioners, in-house counsels, policymakers, business professionals and law and business students at the graduate level"--
This book offers a dynamic introduction to the new developments on national security review of foreign direct investment (FDI) from the perspectives of both domestic law and international investment law. COVID-19 and the Russian invasion of Ukraine have intensified FDI screening to an unprecedented scale, yet its purposes, scope and potential impact remain ambiguous and controversial. The book first attests the legitimacy of FDI screening by using the theory of National Security Constitution. Part I explicates the national security, public order and public health exceptions clauses in international investment law and the novel EU Regulation on FDI screening. Part II provides an in-depth analysis of FDI screening in China, France, Germany, Italy, the Netherlands, Poland and the UK, which have either witnessed momentous changes in domestic law recently or have adopted new laws to cope with the growing security concerns. The book illustrates how States and the EU are using legal instruments to tackle exigent and emerging challenges and the complexity of national security emanated from foreign investment, in the context of evolving disruptive digital technologies and the structural change of the global economy. The volume will be of great value to a wide range of audiences including academics in investment and trade law, legal practitioners, in-house counsels, policymakers, business professionals and law and business students at the graduate level.
