On The Political And Legal Risk Prevention And Control Of China's Overseas Investment

With the depth of Chinese reform and opening up, Chinese economic aggregategrow fast. With the development of economic globalization, Chinese economy isgradually going into the world market economy, and to participate in internationalcooperation and competition. Especially in the past10years, the scale of overseasinvestment of Chinese enterprises expands and investment growth continues toaccelerate.However, we should give full consideration to the various risks facing in theinvestment process, especially the political risk which led to the failure of investment inrecent years. The political risk is often difficult to control and cause serious damage tothe investors, which will also affect Chinese overall economic development. Actually,the enterprise itself is difficult to guard against political risk, so the government shouldgive high priority and protection on it.The paper analyzed the status of the overseas investment in China and the mainpolitical risk and new characteristics. And then it introduced some risk preventionmeasures of typical developed countries. The paper also pointed out the shortcomings inChinese political risk prevention and aimed at learning from other countries’ advancedsystems to seek out Chinese domestic political risk prevention system.The paper was divided into five chapters as follow: chapter1was an overview ofoverseas investment and political risk. This chapter made interpretations of overseasinvestment. A variety of political risk and its prevention significance were discussed.Chapter2introduced the development situation of Chinese overseas investmentand the main political risk that Chinese investors faced. This chapter summarized thecurrent development of Chinese overseas investment, and combining with the famouscases in recent years explored the most prominent of political risk in Chinese overseasinvestment, and its new features compared to the traditional political risk.Chapter3introduced the protection systems of the political risk of overseasinvestment in some developed countries. This chapter introduced, respectively, from thelevel of domestic law and international law, a series of political risk preventionmechanism in the United States, Canada, Germany, and Japan, and also its overseas investment insurance system, bilateral investment treaty and the Multilateral InvestmentGuarantee Agency.Chapter4analyzed Chinese current situation of political risk prevention onoverseas investment. This chapter mainly from the lack of protection of our domesticlaw, the lack of specialized insurance system as well as the shortcomings ininternational bilateral treaties started to analyze Chinese political risk preventioncapability status for overseas investment.Chapter5gave the suggestion that how to perfect Chinese overseas investmentsystem to prevent the political risk. This chapter, on the basis of the advanced system ofthe developed countries, gave the suggestion to improve legal prevention of the politicalrisk on Chinese overseas investment.According to the analysis above, the paper finally concluded that in order to meetthe development needs of Chinese overseas investment and protect the legitimate rightsand interests of investors, China needs to set up a specialized agency in charge of allinternational investment transactions-International Direct Investment Authority. AndChina should establish domestic professional and authoritative risk warning platformand an overseas investment insurance agency. At the same time, sign bilateralinvestment agreements with those countries that Chinese investment goes to, and use asmuch as possible the guarantee share in Multilateral Investment Guarantee Agency.