A Legal Study On China’s State-owned Enterprises Overseas Investment

This dissertation aims to study the legal issues about overseas investments ofChinese state-owned investors. It focuses on three legal relationships, the relationshipbetween state-owned investors and the host country, the relationship betweenstate-owned investors and the home country, the relationship between investors’ homecountry and host country, and tries to solve problems and discussed from the angle ofcombining theory analysis Chinese state-owned investors in foreign direct investmentin the legal problems and countermeasures. After briefly introducing the issues whichwill be explored on later, pointing out their significance, and defining the object ofstudy, this dissertation will discuss them in the following chapters from five aspects.Chapter one defines the concept of state-owned investors on the general theoryof disclosure requirements for patent application, establishing the foundation for thewhole dissertation. This chapter clarifies the meanings of SOE from differentlegislative cases, including EU, Britain, Singapore, New Zealand and the US. Itfurther examines the “state-invested enterprises” in the context of Chinese legalsystem. It also examines the conception of state entity from the perspective ofinternational law through the ICSID, WTO and the UN Convention on JurisdictionalImmunity of States and Their Property. The dissertation distinguishes the public entityand private entity by putting it into international law context. The ICSID pays moreattention on the entities’ physical activities while the WTO lays particular stress onthe governmental function, and the UN Convention has a looser standard which is thatit does not account as a governmental branch only if the entity is an independent legalentity. It further studies the methodology of how to judge state-owned.Chapter two proceeds to conduct studies on the state-owned investor host staterelationship. Thus to settle the legal obstacles and find the countermeasures forstate-owned investors when investing in the host countries. Section I reviews thenational treatment on the pre-establishment stage and its execptions. Section IIanalyses the national security review practice in the United States, Canada andAustralia and other countries. It shows that the state-owned investors apply morestrict vetting procedures and standards. Combining with the current investmentpractices, Section II also examines whether the national security are under the judicial review both under the U.S. and the WTO. It also concludes that it is better to solve itin the domestic judicial way than in the WTO. Section III overviews the investmenttreatment after the investment entering into host countries and discusses theexceptions for state-owned investors.Chapter three studies the state-owned investors home countries relationship,namely, SOI China. It focuses on home countries’ supervision on the investmentactivities and state-owned assets. Section I overviews China’s sources of law ofoverseas investment. There is no complete independent systematic legal system forChina’s state-owned investors. Even for the overall overseas investment system, thereis still no high level central legislation. Section II explores the state-owned investorinvestment regulatory and state-owned assets regulatory system. Section III overviewsthe corporate governance during the oversea investment. Based on the OECD seriesReports, Section III clarifies unfair competition issues of the state-owned enterprise,summarizes the overseas governance structures of the state-owned investors. Aftermaking the theoretical analysis, Section III tries to build the cross-border governanceof Chinese state-owned investors during their overseas investments.Chapter four focuses on investment home countries host countries relationship.It focuses on the international investment agreements involving state-owned investors,especially on China’s standpoint for multilateral and bilateral investment treatiesnegotiations in the coming future. The United States is treating competition neutralityas the weapon to kill Chinese state-owned enterprises’ overseas investment in theinternational legal society. The international law making process of competitionneutrality has already started in the OECD and the TPP. China should keep pay closeattention to the international law making process of competitive neutrality andparticipate in it as much as possible to conform to the interests of the our country.China shall also participate in this negotiation with a comparatively tough attitude,and strives for the realization of international rules for the best interest of China aspossible.