Study On The Current Situation Of Foreign Investment Access System In China And Its Reconstruction

Compared with the developed countries,the foreign investment access system in China has been more conservative.The United States and the EU are promotioning new rules of international investment,more and more countries adopt the Pre-establishment NT and Negative Listings model.In the Sino-US BIT negotiations, this new model has been the premise and the foundation.With the new model’s implementation in Shanghai Pilot Free Trade Zone, the new model will spread in the range of whole country.Reform is a battle, to design the foreign investment access system,we should understand the new model firstly.The implementation of Pre-establishment NT will give the foreign captial the right of admission.That is to say, the foreign capital need not to apply for approval before accesssing into the country,and just need to put on record. This will greatly reduce foreign capital’s time and cost when access into the domestic market,which will promote China’s opening to the outside world.At the same time,simplify the administrative examinations and approval,regulate the market by itself,but not the government,will transform the government’s functions in China,which can build a service-oriented government.However,foreign investment has both positive and negative effects to the country 2of destination.We can not ignore the risks behind the transnational investment.When we introduce in the foreign capital,we should guide it at the same time.We should restrict it reasonably because of the security and interests of our country.Therefore,we should design the negative listings to restrict foreign investment in our country’s important industries and weak industries.At the same time,we should construct the national security review system, to protect the national security.Negative listings list the fields and industries which restrict the foreign captial investing into.The foreign capital invests into the industry outside the negative listings,need not to apply for approval,and just need to put on file.But if the foreign capital wants to invest into the industy which is listed in the negative listings,it still should apply for entry approval.Negative listings mode can protect country’s key industries and weak industries,and prevent them from being monopolized by foreign capital.On the other hand,in the negative listings model, country cannot restict the entry of foreign captial unless the negative listings prohibit or restrict the entry,which is in consistent with the legal principle that Absence of Legal Prohibition Means Freedom.That is to say,we will regulate the market by itself,the government will no longer intervene excessively,which can transfer the Chinese government from "controlling government" to "service oriented government".To design the Negative Listings,we should sort out the current laws and regulations.Because the laws and regulations are the basis of the Negative Listings.Once Negative listings being worked out,our country will be constrained in implementing new restriction measures.Therefore, we should reserve the right to add new restriction measures into the Negative Listings.At the same time,when we design the negative listings,we should pay attention to enhancing its transparency, intelligibility and maneuverability.Article 31 in our Anti-trust Law referred to national security review.But it has not stipulate the content and procedure of national security review,which results in the lack of maneuverability.Therefore, in order to protect the national security, we should detailed the provisions of national security review.Firstly,we should distingush the foreign capital and domestic capital.The definition of foreign capital directly determines the scope of review. Our country usually use registration standard to distinguish the source of capital.This standard will bring about a series of problems. Under the registration standard,a company registered in foreign country is a foreign company,even if it is controlled by our domestic capital,and it will lead to national security review. On the contrary, a company registered in domestic is a domestic company,even if it is controlled by foreign capital,and it will not lead to national security review.In the US,however,actual control standard is used to distinguish the source of investment capital.Under this standard,a company which is controlled by foreign capital is a foreign company,even if it is registed in domestic,and it will lead to national security review.On the contrary,a company which is controlled by domestic capital is a domestic company,even if it is registered in foreign country,and it will not lead to national security review.Comparing the two standards above,obviously the actual control standard can expand the scope of review,which can safeguard the national security better.Actual control standard needs us to identify the meaning of control.Identifying the control,we should not only consider the equity share of foreign capital,we should also consider whether the foreign capital can decide or effect on the major issues of company through agreement or trust.The concept of "national security" is very complex and changeable,so when we define the content of review,we can take the enumeration method.Enumerating the situation which will lead to security review.As well,we can use elastic clause to provide more comprehensive protection to national security.When constructing the security review process,we should inducing in more flexible measures,such as discuss procedure before starting review process,and risk mitigation measures.We should not take national security review as the investment barriers. At the same time,we should pay attention to the supervision of security review authority,to prevent the authority from corruption.As a developing country, we need foreign capital to promote the optimization and upgrading of the domestic industrial structure, but also can not ignore the negative effects of foreign capital.In order to make a balance between opening-up and national security,when we adopt to give the foreign capital Pre-establishment NT,we should also design the Negative Listings and construct the national security review system, to protect our national security.The reform and promotion of foreign investment access system can not accomplish at one stroke. Stones from other hills may serve to polish the jade of this one.So we should absorb the advanced experience of foreign countries,to reconstruct our investment access system.