Study On The Labor Legal Risks When Chinese Enterprises Invest Overseas Under The "Belt-and-Road" Initiative

The frequency and scale of Chinese enterprises’ outward foreign direct investment(OFDI)have increased significantly under the background of ―Belt-and-Road‖ Initiative(BRI).However,the outcome of these OFDI projects sometimes has not operated as expected,and even has been fundamentally failed.When Chinese enterprises make overseas investment,they have to face various investment risks,such as political risk,legal risk,default risk and commercial risk,among which legal risk has become one of the main factors resulting to investment failure.As a kind of legal risk,the labor legal risk discussed in this dissertation is worthy of special attention because it has been involved many times in China’s overseas investment.OFDI projects under the BRI have their particularities,which can be summarized as follows: First,their working staff consists of local employees and staff sent by the Chinese parent company.Because OFDI projects under the BRI tend to focus on infrastructure construction,there is a need to send skilled personnel from China who can work directly.Second,China’s OFDI projects under the BRI often require a strategy of establishing more long-term labor contracts.Due to the long investment cycle of BRI projects,long-term labor contracts with core production workers are often required,and long-term labor contracts will cause problems related to social insurance,supporting benefits,union activities and so on.Third,China’s overseas investment projects under the BRI will involve the livelihood of local residents,employment,environmental protection,human rights and other non-commercial interests of the host country,which are likely to attract wide attention,and the fulfillment of their social responsibilities is particularly important.The above three particularities of BRI investment projects of Chinese enterprises make the legal problems they face also present their particularity.Therefore,the traditional way to deal with labor legal risks cannot be directly applied in the BRI investment projects.This dissertation starts from the particularity of BRI investment projects of Chinese enterprises,and then analyzes three main components of the labor legal order,namely salary,labor union and the localization of employment.The dissertation discusses the special issues of host countries’ legal environment that may embody significant particularities resulting from the three features highlighted under BRI projects.Moreover,it is demonstrated that these particularities are enough to generate unique requirements for compliance management construction.Through analysis,this dissertation argues that,in terms of salary and welfare,Chinese investors and their investment enterprises may violate the provisions of equal payment in the host country because of the different standards of salary and welfare between Chinese expatriate and local employees;Local investment enterprises may encounter legal risks of dismissing the labor contract because of the long-term investment;and some other issues in the similar kind.In terms of the risks resulting from the mechanisms regarding labor unions,long-term labor contracts facilitate local workers to form labor unions,and the possibility of union movement is higher;Chinese enterprises are easily involved in people’s livelihood,employment,human rights and other non-commercial interests,causing union resistance;and some other problems.In terms of local employment,the identification of employees’ relatives in the calculation method of localized employment proportion is easy to cause compliance risks;The establishment of administrative regulations to regulate local employment is not conducive to the stability of the policy;Local employment policies of enterprises often touch non-commercial interests such as local people’s livelihood and employment,easily causing dissatisfaction;and some other problems.These special features deriving from the peculiarities of BRI projects are not common legal risks in the traditional sense,so Chinese enterprises should pay extra attention to them.On the basis of the above conclusions,this dissertation suggests the practical measures to reduce the labor legal risk of BRI investment projects,respectively from the perspective of enterprises and that of the government of the home state.These suggestions may be potentially valuable for guiding future investment,as well as crystalizing its theoretical significance into the practice.