Study On The Regulation Of International Direct Investment Incentives

With the increasing importance of international direct investment to the development of economy, every country makes all kinds of investment incentive measures to attract the investment of external capital. The severe competition on investment incentives in the world caused the control on investment incentives to come into being. This research paper is divided into 3 parts which focuses on the international control on the investment incentives.In the first part, the author makes a general introduction to the economic background, definition, classification and the rules of international control on investment incentives. Actually the reason and necessity of the international control on investment incentives is far from reaching agreement. Some developing countries disagree with the control measures on base of protecting national economic power, and the developed countries work together to promote the control measures in the name of economic liberalism. On the base of analyzing the two propositions, the author believes that international control on investment incentives as a kind of functions of international economic law which is beneficial to the establishment of fair and reasonable international economic order because of the unfair competition between developing countries and developed countries and the negative influence on the developing countries.In the second part, the author makes an introduction to the present situation of international control on investment incentives. There are no specific treaties toward investment incentives, but the rules of such a system have been listed in some international documents. In the bilateral and regional investment treaties and WTO documents, the demand of outstanding achievement, prohibition and limitation of subsidy presents binding indirect influence on investment incentives. Though comprehensive and multilateral investment treaties does not come to an understanding, the positions involved in these documents attract the interesting of the people. After analyzing the present position of control on investment, the author presents her own suggestions: we should take an active attitude to take part in the drawing up of treaties and can keep the investment interests balance between developed and developingcountries. WTO is the most proper subject leading the drafting of control rules of investment incentives which should be stipulated in the comprehensive and multilateral investment treaties and not be a separate regulation.In the third part, on the base of practices in our country, the author presents some suggestions to adjust the investment incentives measures because of the conflicts between such measures and WTO documents and the promises as an entry demands to the WTO. The traditional investment incentives measures only guided by the origin of capital should be changed to investment incentives measures guided by the standard of industry and region in accordance with the development of economy in our country.