Research On WTO Rules And Improvement Of China's Foreign Investment Law

Foreign investment law of China has ever played a very important role in the process of attracting and utilizing foreign investment. However, with the development of economy, enhancement of comprehensive national strength, as well as the establishment of market economy, our foreign investment law has shown irrationalness. In order to fulfill our accession commitments and in accordance with WTO rules, it is necessary to adjust and improve current foreign investment law.Apart from the introduction and conclusion, this paper is divided into three chapters. The first chapter is"The Status and Main Problems of China's Foreign Investment Law". Since 1978, the implementation of Reform and Opening-Up, our country has made remarkable achievements in attracting foreign direct investment. At the end of 2006, our country had approved the establishment of 594,445 foreign-invested enterprises, and the actual use of foreign capital had achieved 703,974 billion U.S. dollars. In foreign legislation, so far, the National People's Congress and the State Council have formulated up to more than 200 foreign investment laws and regulations. Departments of the State Council, local provinces, municipalities, autonomous regions and special economic zones also made a lot of regulations and local rules related to foreign investment. The bilateral and multilateral international treaties China signed have a number of about 100. China has formed a foreign investment legal system that various special legislations and single laws and regulations contact and integrate together.Through studying the status that China attracting foreign investment and foreign investment legislation, we can sum up that foreign investment law of China has three characteristics: firstly, it does not have a unified foreign investment law and legislate separately based on the form of enterprises; secondly, it has numerous legislative levels and institutions, and the legal system is complex; thirdly, it takes the"dual track"model that foreign and domestic invested enterprises legislated respectively. At the same time, the author points out the main problems foreign investment law existed in nowadays that China has become a member of WTO: firstly, it has a large number and various names, lack of systemicness; secondly, the contents are full of contradiction and conflicts, lack of uniformity; thirdly, it legislates separately by the enterprise form, the legislation standard is out of date; fourthly, it has complicated procedures and longer period for approval system.Chapter two is"Investment-Related Protocols in WTO". Through analyzing the WTO investment-related agreements, the author points out the gap between China current foreign investment law and WTO rules. WTO's basic principles that related to investment include the principle of national treatment, principle of general elimination of quantitative restrictions and the principle of transparency. Protocols that related to investment are mainly Agreement on Trade-Related Investment Measures, General Agreement on Trade in Services, Agreement on Trade-Related Aspects of Intellectual Property Rights, Agreement on Subsidies and Countervailing Measures. Among them, Agreement on Trade-Related Investment Measures is the first multilateral treaty to carry out international control on investment measures and it mainly regulates goods trade-related investment measures; General Agreement on Trade in Services is the first rule and discipline managing international service trade, and trade in services are brought into the scope of control of WTO for the first time; Agreement on Trade-Related Aspects of Intellectual Property Rights is the first international agreement that comprehensively bring the protection of intellectual property rights into the world trading system, and it is now the world's most comprehensive international agreement about the protection of intellectual property rights. Agreement on Subsidies and Countervailing Measures is so far the most influential multilateral international treaty with a clear legal effect in restricting investment incentives measures.Through the analysis of investment-related WTO's agreements, we can still find the gap between China foreign investment law and WTO rules, mainly in the following areas: firstly, it does not meet the requirement of national treatment. At present, investment measures in our foreign investment laws run counter to the principle of national treatment mainly present with a"super-national treatment", including the investment subject, tax preferences, production and management, financial management, etc. Secondly, it does not meet the transparency requirement. The contents of many laws and regulations that have been published are too simple, all kinds of laws and regulations lack of coordination in nationwide, and also exist a lot of unpublished internal documents, which all have a effect to the transparency of law. Thirdly, it does not meet the requirement of general elimination of quantitative restrictions. Quantitative restrictions on foreign investment are expressly prohibited by Agreement on Trade-Related Investment Measures, which still exist in some local legislation of China.Chapter three is"The Improvement of Foreign Investment Law". The author puts forward some suggestions from aspects of the legislative system, content and other related issues for foreign investment law. For the legislative system, through the inspection of foreign investment legislation system of foreign countries, the author thinks that China should re-divide the system of foreign investment law. Separating the contents of original three foreign invested enterprise laws, the part which involves the establishment, termination, organization and management of foreign invested enterprises should be adjusted by Company Law and the relevant enterprise organic laws; the part involving the access of foreign investment, industry guidance, treatment, levy, nationalization and compensation of foreign investment should be adjusted by the re-constituted Foreign Investment Law; administrative behaviors, as guidance, management and supervision for foreign invested enterprises by national economic management department, should be adjusted by the relevant domestic department laws.In the content of foreign investment law, first of all, China should delete the laws and regulations that are inconsistent with the WTO rules. Although many provisions against Agreement on Trade-Related Investment Measures in current foreign investment law of China have been resolved from the perspective of the fundamental law, there are still a large number of administrative rules and local laws and regulations need to be cleared and revised. Secondly, we must expand the area that foreign investment access to and improve the examination and approval system. China should gradually expand the area foreign investment access to and formulate industrial policies according to the level of development of domestic industries. Improving the examination and approval system and applying different procedures according to industry classification and the different types of investment. Thirdly, gradually increasing and improving the content of national treatment in the operations of foreign investment. The principle of national treatment is not only the WTO's requirement for the general code of international investment conduct, but also the necessity of development of China's foreign investment law. Along with the increase in foreign investment of China and the improvement of domestic investment environment, the foreign policy of China should be adjusted, that is, the center should be transformed from preferences to fair. To achieve this, the most fundamental part is to treat domestic and foreign investment equally and give foreign-invested enterprises national treatment.It is discussed mainly from three aspects about other issues related to the improvement of foreign investment law: firstly, standardizing the legislative authority and the legislative procedure. Through standardizing the legislative authority, it could avoid the duplicate contents and conflicts among foreign investment laws and regulations, ensure that foreign investment laws implement effectively throughout the country and increase the transparency of laws and regulations to make the country's laws and policies with unity. Secondly, changing the legislative approach. About legislative approach, we should not only consider it from the point of investment law, but combine the investment and trade, and it should be noted that the effects investment legislation may bring to trade. Thirdly, improving the supporting laws and regulations of foreign investment law. In the process of attracting foreign investment, it is concerning with international tax avoidance, monopoly, dumping, loss of state assets and other issues. Although other economic activities may also be related to these areas, they are different on specific requirements, which need us to improve the relevant regulations of foreign investment law.