Studies On The Legal System Of Cross-Straits Direct Investment Under Globalization

In the context of globalization, not only international investment rules tend to be gradual integration, the laws of foreign investment in most countries also develop toward more liberalization. In the process of globalization, Mainland China has become a very important Contract Party in the international investment agreements (IIAs) network, and Taiwan has also concluded some bilateral investment agreements. As the member of the World Trade Organization (WTO), Mainland China and Taiwan has also signed a certain amount of free trade agreements (FTAs) covering investment issues respectively.With all the efforts of the governments in both sides, the cross-straits direct investment has entered into a new stage of two-way direct investment. However, under the background of globalization, in order to keep with the globalization tendency and meet with the inherent needs of future development on investment between Mainland China and Taiwan, the both sides should build consistent, stable and predictable legal framework of direct investment in cross-strait. Therefore, this Article was divided into seven parts to analyze and discuss the topic.In the introduction of this article, the author elaborated the basic tendency of globalization and the integration of international investment rules; then it mainly talked about the present situation of investment communication between both sides under the background of globalization and examined the actual state of attracting foreign investments and investing abroad of Mainland China and Taiwan.ChapterⅠanalyzed the latest development of the international investment legal system in the context of globalization. In this Chapter, it discussed the main changes and the reasons of changing of the foreign direct investment rules in domestic law firstly; and then it briefly discussed the multilateral international investment agreements and the protection and liberalization of the investment. Lastly, citing bilateral investment treaties (BITs) and FTAs as example, the author discussed the developing situations and features of the bilateral and regional investment agreements. And centering on the core problems between bilateral and the regional investment agreement and the rules of international investment protection and liberalization, the author carried on the discussion combined with relative international investment disputes from the fair and equitable treatment, the expropriation and compensation, the umbrella clause, the settlement of investor-state dispute, the access and establish of investment, the forbidden of performance requirements and the transparency of investment policies. Through the analysis, the author pointed out although the regulations of above specific issues in different international investment agreements are different from each other, and different scholars’explanation as well as the investment dispute settlement practices are also different, in the latest IIAs, including BITs and regional trade agreements (RATs), the core feature--investment protection has not changed. Moreover, the new generation of international investment agreements inclines to promote the liberalization of international investmentChapterⅡof the Article talked about China’s obligations on international investment protection and the liberalization. In this part, it firstly overviewed international investment treaties concluded by China; and then discussed China’s obligations on investment protection and the liberalization under multilateral international investment treaties. The author analyzed China’s obligations on investment protection and the liberalization in BITs and FTAs in detail. It mainly concerned with the fair and equitable treatment, full protection and security, expropriation and compensation, the umbrella clause, the settlement of investor-state dispute, the definition of investor and investment, national treatment, most-favored-nation treatment, forbiddance of performance requirements and transparency of investment policies. From the analysis, we could know that under the background of globalization, the basic principles and standards of investment protection and investment liberalization which China insisted at the initial period of reform and open has changed. For example, to the issue of expropriation and compensation, China has accepted "Hull Rule" actually; to the settlement of investor-state dispute, China has accepted the jurisdiction of ICSID.ChapterⅢdiscussed Taiwan’s obligations on international investment protection and liberalization. In this part, it firstly discussed the basic content of international investment protection and liberalization obligations of Taiwan in WTO framework; and then discussed the Taiwan’s efforts on concluding BITs and FTAs, its contractual capacity, and the name of contracting party etc. The Article pointed out that, even in modern international law, Taiwan could not conclude BIT in the name of "Republic of China" or "the government of the Republic of China". As a WTO member, Taiwan should conclude FTA in the name of "Chinese Taipei". And then, this Article fully analyzed the basic contents of investment protection and liberalization obligations of Taiwan in BITs and FTAs. In these agreements, Taiwan has fully manifest its status as the main investor, and the specific rules in FTAs concluded by Taiwan, such as investment treatment, expropriation protection,settlement of investment disputes, were very close to US and Canada’s FTAs practices. In ChapterⅣthe author analyzed the Foreign Investment Law of Taiwan and its legal system of overseas investment. In this part, the legal system of foreign investment of Taiwan was discussed firstly, such as the overview, the legislative origin and the legislative system. Furthermore, several substantive issues of the Foreign Investment law of Taiwan were also analyzed in this part, for example, the access of foreign capitals, treatment of investment and expropriation and compensation. Then, the author examined the overseas investment legal system of Taiwan. The Article pointed out Taiwan had carried out the policies to attract foreign capitals and published and revised a series of laws to promote, encourage and protect foreign investment and investment of overseas Chinese. In the meantime, Taiwan also established a legal system to promote the overseas investment and established the overseas investment insurance system to protect Taiwan’s businessmen who invest abroad.ChapterⅤmainly considered the existing legal system of cross-straits direct investment. The history of the communication of direct investment between two sides was overviewed firstly. The restrictions on the direct investment in the period of Democratic Progressive Party were also discussed in detail. Moreover, the author analyzed the illegality and impropriety of the legal system to restrict cross-straits direct investment comprehensively from the perspective of WTO. Besides, the Article analyzed Ma Ying-jeou’s adjustments on legal system of cross-straits direct investment. The author thought Taiwan’s attitude on the opening of cross-straits direct investment was still discreet, and even stopped. Especially, there was an enormous gap on investment admission between Mainland China and foreign countries. At the end of this Chapter, the author discussed Mainland China’s policies to encourage and protect the investments of Taiwan’s businessmen and the legal system to encourage direct investment from Mainland China. The author pointed out, although Mainland China has already established a sound legal system to protect the investors from Taiwan, however, there are still some defects in the rights protection. As to the investment to Taiwan, although the basic policy of Mainland China has set to encourage invest in Taiwan, the existing regulations were principled and procedurally. And there was no legal system in Mainland China to protect the direct investment in Taiwan.ChapterⅥwas the standpoint of the Article, which considered to building the cross-straits direct investment legal system in the context of globalization. In this part, it first discussed the adjustments of both sides on the cross-straits direct investment. The author thought Taiwan should accommodate with the development international investment rules under the background of globalization and the regional trade arrangement, and observe the commitments when entering WTO. Therefore, Taiwan should moderate the policies of investing in Mainland China, simultaneously, it should treat the direct investment of Mainland China fairly and equally and formulate the legal system to promote and encourage cross-straits direct investment as soon as possible. On the other hand, Mainland China should consummate right protection mechanism of the Taiwanese businessmen, work out specific laws to promote and encourage Mainland businessmen to invest in Taiwan and establish legal system to protect the direct investment of Mainland businessmen. Furthermore, the Article also demonstrated the building of bilateral legal framework on cross-straits direct investment. It not only analyzed the necessity and the feasibility to build above mentioned legal system, but also elaborated the form and method and the basic principles of the legal framework. Moreover, to the substantive issues in building the legal system of cross-straits direct investment, such as the definition of investor and investment, market access and non-discrimination treatment, fair and equitable treatment, "umbrella clause", the political risk guarantee, forbiddance of performance requirement, transparency and the investor-state dispute settlement, the author also has discussed full-around and comprehensively, and tried to put forward rationalization proposals.In conclusion, the consistent and stable developments of cross-straits direct investment which on the basis of consistent, stable and predictable legal system played an important role in the long-term stability between Mainland China and Taiwan. Under the background of globalization, the governments of both sides should establish and sound the legal system on cross-straits direct investment. Meanwhile, in consisting on the one China Policy, we should respect the fact that Mainland China and Taiwan were members of WTO, take full advantage of the regional trade arrangement mechanism under the WTO framework, establish the bilateral legal framework of cross-straits direct investment and provide consistent, stable and predictable legal system to stimulate cross-straits direct investment from the preliminary normalization toward normalization and to the liberalization finally.