A Revisit to China’s Foreign Investment Law: With Special Reference to Foreign Investment Protection

Abstract

Three foreign investment laws of China were enacted when she was mainly a capitalimporting state. The main purpose of these laws was to boost the Chinese economy with the capital, technology and management of foreign investors. Many preferential treatments, rather than national treatment, were given to foreign investment especially before the country joined the WTO. Following the reform of market economy, fair and equal treatment to foreign investors are replacing the preferential treatments. A new draft of Foreign Investment Law was released in the spring of 2015 to reform the governance of foreign investment by granting national treatment to foreign investors in both admission and operation. The restrictions to foreign investment will be subject to the categories of special administrative measures, which are composed of forbidden and restrictive categories. This is going to be China’s biggest reform on the legal system of foreign investment since 1980s.