Political Risks Of China's Energy Overseas Direct Investment And Legal Precaution

Since having joined the WTO, in order to solve the passive situations of the shortage of domestic energy and growing demand for energy, China has positively expanded the direct investment of overseas energy in greater scope and depth and opened up wider energy supply channels. Energy companies represented by the China National Offshore Oil Corporation (CNOOC) and Petro China Company Limited., etc. have made direct investment actively in high-grade areas all over the world, complied with the requirements of Chinese enterprises "Go Out" Strategy and good results have been obtained. Although peace and development continue to remain as the main theme of the current time, conflicts still exist in some areas and become increasingly intense. Overseas direct investment of our energy companies are always in these turbulent districts, such as the Middle East and Latin America, etc. and these companies often meet with all kinds of political risks alongside of the state acts of host countries or some accident factors. The characteristics of these political risks and how to effectively prevent them are not only the research problems for Political science, diplomacy, economics and other subjects, but also the topics focused upon by International Economic Law.Based on the fundamental principles of International Investment Law, this paper gives an empirical analysis of the political risks suffered by energy companies of our country and other countries in the world which make overseas direct investment and presents the new changes of the political risks; systematically explores the legal prevention of the political risks of our energy overseas direct investment and intends to prevent the political risks of our energy overseas direct investment through measures of the legal improvement, systematic protection and so on.The first part of the paper describes the current situation and characteristics of our energy overseas direct investment and points out that the scale of our energy overseas direct investment will get larger and larger and the fact that the high-grade areas of world energy have already been divided by the developed countries and form their own "sphere of interests". The second part systematically analyses the concepts and features of risks and political risks and is the definition part of this paper; the third part gives a systematic and empirical analysis of the specific types and new changes of the political risks of our energy overseas direct investment. Our government and energy companies shall pay attention to these issues. The fourth part, which is the key part of this paper, brings forward the prevention of the political risks of energy investment through the improvement of laws and systems specifically mentioned as follows:Firstly, our government shall set up and improve laws and systems related to the protection of energy direct investment and start with improvement of our laws, advance gradually and take precaution at every step. The specific measures are: 1, clarify the strategy of energy overseas investment and reasonably direct the investment of energy companies, 2, promptly improve the insurance system of our overseas investment 3, improve the financial policies and provide financing support to energy companies which have met with political risks.Secondly, sign and amend related bilateral investment protection agreements actively with energy producing countries, legalize investment consensus reached by two countries and sign specialized bilateral investment agreements concerning the protection of energy investment if necessary.Thirdly, attach attention to the functions of related international investment protection treaties and prevent the political risks of energy direct investment by actively using international investment protection treaties, especially the Convention on the Multilateral Investment Guarantee Agency and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States.This paper mainly conducts research from the view of the government and hopes to offer references for the legal system construction concerning investment protection of the government and the acts of energy companies.