Since the end of 1978, China has transformed its economic and political structures by adopting an 'Open Door Policy', promoting international trade and welcoming foreign investment in China. In 1998, China's exports were US $ 183,8 billion and US $ 24...
Since the end of 1978, China has transformed its economic and political structures by adopting an 'Open Door Policy', promoting international trade and welcoming foreign investment in China. In 1998, China's exports were US $ 183,8 billion and US $ 240 billion of foreign capital has been already invested in China. In 2004, China was third in international trade with a total volume of US $ 1.1 trillion and foreign direct investment (hereinafter 'FDI') in China nearly mounted to US $ 60 billion. Thus, much of this growth in trade can be attributed to FDI.
However, the Chinese FDI legal system is far from well-established. There are, of course, many factors which are slowing legal development in China. For example, an influence of a planned socialist economy, a lack of concern for long-running policies and practice, corruption and lack of transparency and others.
Long-term investors are concerned about the standards of investment treatment offered by China. There are three broad categories of treatment standards in foreign investment law: national treatment, most-favored-nation treatment and fair and equitable treatment. China has not hesitated to confer most-favored-nation treatment and fair and equitable treatment, but has been reluctant to promise national treatment to foreign investment. Foreign investors has desired national treatment as one of the most important safeguards for an equal competition market in host country. Applicable scopes of and reservations to national treatment in the FDI legal system, naturally, vary from country to country.
This thesis focuses on the national treatment in the Chinese FDI legal system. Part Ⅱ reviews national treatment in international law. Part Ⅲ examines bilateral investment treaties and the TRIMs agreement. Part Ⅳ studies the status quo of national treatment in Chinese FDI law and particularly analyzes the change in the Chinese legal system, and the feasibility of adopting national treatment in Chinese FDI regimes. In conclusion, it takes a long time to adopt national treatment, but it's time for China to start.
The development of the economy and the legal system in China has provided a better situation for China to adopt national treatment. Recently China abolished some obstacles which were inconsistent with WTO TRIMs agreement, to become a member of the WTO. But China has to adopt a more comprehensive national treatment to create a more favorable legal system to foreign direct investment.