Abstract
The Chinese legal subsystem regarding overseas investment by Chinese entities includes relevant domestic laws and international treaties, primarily bilateral investment treaties (BITs), international tax treaties -mainly bilateral tax treaties (BTTs)- and free trade agreements (FTAs). Chinese laws governing overseas investment are far from perfect, as overseas investment administration, promotion and protection generally remain at the level of departmental regulations, which is out of sync with the fast-growing overseas investment activities by Chinese organizations. China has signed a multitude of international treaties, but these treaties are generally outdated since most of them were institutionally designed with the idea that China would be the receiving, not contributing, country for such investments. In other words, these treaties are unable to meet China’s current overseas investment needs, and hence, urgently require amendments and improvements. Accordingly, accelerating domestic legislation for investment while improving relevant international treaties is a top priority in building China’s overseas investment promotion system.
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Notes
- 1.
Treuatbeit AG and Euler Hermes Kreditversicherungs-AG are only responsible for providing investment guarantee services; the organizations in charge of insurance review and approval include a committee with the power to make final decisions that is made up of representatives of the Federal Ministry of Economics and Technology, the Federal Ministry of Finance and the Federal Foreign Office, and an advisory committee made up of representatives of the accounting review committee and the Deutsche Bundesbank.
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Note that approval with respect to overseas investment insurance should differ from the approval of overseas investment projects.
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Some countries also take other political risks, such as the government’s breach of contract, delay in payment, currency depreciation and business interruption, as needed.
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Compensation for war risks is unavailable for riots and terrorist activities resulting from general labor disputes or economic conflicts.
- 5.
Sino-foreign joint ventures and cooperative enterprises and wholly foreign-owned subsidiaries established in China are commonly known in this country as the “three types of FIEs”.
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© 2015 Social Sciences Academic Press and Springer-Verlag Berlin Heidelberg
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Pei, C., Zheng, W. (2015). The Legal Subsystem. In: China’s Outbound Foreign Direct Investment Promotion System. Research Series on the Chinese Dream and China’s Development Path. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-45631-6_2
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DOI: https://doi.org/10.1007/978-3-662-45631-6_2
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