The Internationalization of China’s Foreign Direct Investment Laws
The Internationalization of China’s Foreign Direct Investment Laws
Abstract: This Article delves into the conventional assumptions regarding the openness (or lack thereof) of China’s markets to overseas investors, and critically assesses the merits of the new legal framework for foreign direct investment (“FDI”). It analyzes three strands of the legal system that affect the flow of overseas capital: merger control, international investment agreements, and national FDI regulation. This Article focuses on the interplay between national and international law, and the traditional assumptions about China that often infuse Western scholarship. After pointing to the risks of utilizing merger review rules to address the national security concerns of FDI operations, this Article discusses how China’s latest endeavors to expand its shy international commitments have been indefinitely truncated by rising political tensions. In an attempt to foster an investor-friendly atmosphere, a new Foreign Investment Law (“FIL”) has streamlined the domestic FDI legal framework and removed vital obstacles. This Article argues that a combination of unfamiliarity with tacit customary rules and skepticism about the candidness of the improvements could jeopardize the effectiveness of the reform. Relying on a combination of doctrinal research methodology and a “law-in-action” approach, it suggests that the success of the new rules is on both investors and policymakers, and points to the limitations of resorting to national as opposed to international law in the investment liberalization process.
Recommended Citation: Sandra Marco Colino, The Internationalization of China’s Foreign Direct Investment Laws, 45 Fordham Int'l L.J. 275 (2021).