A Study On Legal Issues Of Responsing To Political Risks In Chinese Overseas Private Direct Investment

China’s outward FDI net flows(hereinafter referred to as ‘flows’) in 2014 reached $123.12 billion, increased by 14.2% compared to previous year. However, there is a higher incident on the political risk of our nation’s foreign investment, because of the later starting on foreign investment, the lower level of domestic industry, the socialist political system and the non-standard business behavior. Therefore, the title of this paper is a study on legal issues of responsing to political risks in Chinese foreign private direct investment. That is to say, this paper tries the best to cope with political risks in domestic law and international law from a nation’s view.The paper uses two methods to explore the issue: method of comparative analysis and method of semantic differential. By means of the former, we could seize the characteristics and generality so as to make a good knowledge of legal concepts and legal phenomenon. By means of the latter, it makes good foundations for my position. After a serious analysis and demonstration, we could make conclusions as follows:The first, there is the necessity and feasibility on legal mechanism for political risks on foreign investment. Now, there is a higher incidence on the political risk of our nation’s foreign investment. And its foundation is so strong that it can’t be removed at one moment. Moreover, the bad effect of political risks is so heavily, we even couldn’t afford it. So, it’s necessary to take legal measures for political risks. Just nowThere exist some effect mechanisms to resolve the matter in the international legal system. And, in our country, our economic law is made perfectly by the master and we have a big passion to make a law. Thus, the plan is feasibility.The second, usually, one nation has the legislative power, law enforcement power and judicial power. For this article, maybe the legislative power and law enforcement power can be used to resolve the problem. Therefore, in the domestic legal system, our country should perfect our international investment legal system, supervise and protect foreign investors,build the foreign investment insurance.The third, one nation have the power to sign treaties, participate the activities started by international economic organizations, economic sovereignty and engage in civil activities. For this theme, maybe the power of signing treaties can be used. In the international legal systems,we should sign BIT actively, take an active part in international treaties, use the diplomacy tools to protect our foreign investors’ interests properly.