Research On The Political Risk Prevention Of The Overseas Direct Investment Of Transnational Corporations In The United States

In the process of global economic integration,overseas direct investment is one of the most important methods of international economic exchanges.Economic globalization,represented by investment liberalization and facilitation,has been an important driving force behind the rapid development of the world economy in the past few decades.Utilizing foreign capital and strengthening international investment cooperation is the inevitable trend of economic integration.However,the political risks of foreign direct investment once occurred,it will definitely cause a major blow to investors.The appropriate handling of political risk and balancing the interests of foreign investors and host countries have been important considerations for international investment.Therefore,Discussions on prevention of political risks in overseas direct investment has both important theoretical and practical significance.The United States is both the host country and the largest multinational corporation home country in the world today.Throughout the history of World War II,the rise of the United States as a super-hegemony has strong consistency with the external expansion and development of multinational corporations.The overseas direct investment of transnational corporations plays an important role,effectively maintaining the leading position of the United States in the world market,ensuring the development of its competitive industries,and spreading the American economic and political values to all parts of the world,thus becoming an important carrier for the implementation of the American national security strategy.Based on the significance of overseas direct investment by transnational corporations,the United States has spared no effort to support overseas direct investment and has achieved great results.After the Second World War,as the competition of American transnational capital in the international investment market intensified,the political risk it faced also began to increase.The American government strengthened the prevention of political risk of overseas direct investment by transnational corporations,establishing a political risk prevention system mainly constituted by laws,insurance and policies.One of the main measures taken by the United States to prevent foreign direct investment by its multinational corporations is that congress has enacted a series of laws to protect the interests of private investment.Besides constructing the prevention and control of investment risks from the perspective of domestic law,the United States also starts from bilateral,regional and multilateral agreements at the level of international law to establish an international cooperation mechanism for the prevention of political risks in overseas investment.Domestic law and international law are mutually reinforcing,thus the United States has established and improved the investment protection system,establishing the dominant position of the United States in the rules of international law.The United States protects,supervises and implements relief arrangements for the whole process of investment entry,operation and exit of transnational corporations.In the aspect of domestic law system design,with the foreign aid law as the core,the United States initiated the overseas investment insurance system to ensure the protection of overseas investment.The three most important amendments are the Hickenlooper Amendment,the Gonzales Amendment and the Helms-Gonzales Amendment,which further strengthen the prevention of political risk of overseas investment by American multinational companies.In addition,the passage of the Foreign Corrupt Practices Act and other bills regulates the behavior of domestic companies in the United States and shapes a free and fair investment environment in the United States.In practice,severe sanctions are used to urge other countries to imitate U.S.legislation,creating or amending national laws on investment jurisdiction,and thus relaxing the control of overseas capital,reducing investment risks,and to help achieve a free environment for international investment.At the level of international law system,the United States has actively signed bilateral agreements to protect overseas investment with capital-importing countries.From both aspects of substantive law and procedural law,it ensures that U.S.overseas investments and investors can enjoy national treatment and most-favored-nation treatment.By using subrogation procedure,the political risks encountered by the U.S.multinational corporations' overseas investments can be solved through legal rules.In addition,the United States actively participates in international multilateral agreements,resolving disputes between investors and countries at the level of international law through the ICSID mechanism and investment-related provisions under the framework of WTO,restricting the national policies of host countries.Combination of domestic law and international law,substantive law and procedure method,a complete legal system which emphasizes that the domestic legislation of extraterritorial jurisdiction power,and also uses international legislation to protect against overseas risks,making the investment from the United States can get fair and reasonable treatment through the entire process.In addition to legislative guarantee,insurance system also plays an important role in political risk prevention.In its process of overseas investment,American transnational corporations often suffer from political risks of the host country,for instance,expropriation? nationalization?foreign exchange restrictions?civil strife in war and etc.However,it is often difficult to obtain the right of relief claim exercised by investors in the host country in a timely and effective manner so transnational corporations turn to the U.S.government for help.In this process,the United States elites realized that they need to establish a system of specialized institutions to relieve the political risks encountered by domestic investors in the process of OFDI.In practical exploration,the United States established a domestic overseas investment insurance system,it underwrote the political risk of overseas investment through overseas private investment companies,and then negotiated with the host government on behalf of investors to obtain compensation.On the other hand,the United States has actively explored the establishment of an investment guarantee system at the international level,to strengthen the relief of political risks of overseas investment through multilateral investment guarantee agency.The superimposed insurance system at the domestic and international levels promotes the overseas investment development of American multinational companies,and also ensures the political risk compensation of multinational companies,thus reducing the investment risk.In addition,the United States has established a sound financial?tax?information support?technical support?financial support and other policy systems.Using strong military force as a deterrent against hostile or so called "rogue states".It provides political risk prevention support through various non-governmental organizations,industry associations and think tanks.In order to have an impact on the policies of host countries,American liberal ideas are propagated and infiltrated in the world through non-governmental organizations.To sum up,the United States not only solves the political risks faced by transnational corporations in overseas investment through prevention and relief,but also makes efforts to strengthen the competitiveness of its own enterprises,which has become an important means for transnational corporations to prevent overseas political risks.Since the founding of the People's Republic of China over 70 years ago,China's overseas investment has grown from scratch,from weak to strong,and from single to diversified.With the expansion of the scale of outbound investment,China has become the world's second largest capital exporter,and Chinese companies have become major players in international investment.The rapid growth of multinational corporations has brought profound impacts on the development of the world economy and society,and has also brought a wider market space for the rapid development of the Chinese economy.It has also brought unprecedented opportunities for China to integrate into the world economy.Chinese multinational companies have begun to go global,China needs to draw lessons from the United States for its overseas investment political risk prevention experience in multinational companies.China must adjust its strategy,strengthen corporate compliance operations,providing a better environment for Chinese enterprises to go out and establishing a better prevention and control system for multinational companies,guarding against political risks of overseas investment.The author suggests that China can improve the overseas investment control mechanism from two directions.On the one hand,using legal means such as the jurisdiction,the extension of the scope of protection to the foreign multinationals,and influence the regional and international social development,formation and development of the rules of the system and to protect the investment interest,that is,the active expansion of protection.On the other hand,when China's overseas investment interests are damaged or threatened by political risks,it can adopt institutional ways to prevent the damage or threat of damage,such as refusing to recognize and enforce foreign court judgments to safeguard the investment interests of domestic multinationals,which is the so-called defensive protection method.The combination of these two approaches is conducive to enriching the protection of single institutional means,innovating the diplomatic protection and foreign aid system,and constructing the comprehensive protection mode with the cooperation of expansionary and defensive nature.