Investment Promotion Legal Issues

Foreign direct investment (FDI) is profitable for developing economic, regulating industrial structure and encouraging transfer of technology. One of the features of globalization is the worldwide competition for FDI. Over the past two decades , most host countries and home countries have liberalized their investment regimes , which reflects the growing number of countries that proactively pursue investment promotion efforts . At the same time, investment incentives may result in competition between countries and divert financial resources that could otherwise more effectively used for development purposes. With the rapid development of globalization, sovereignty and market rules including investment liberalization that is basic of incentives have been flintly challenged. In order to conquer the challenge, every country should take part in dialogue and cooperation one another, and harmonize those incentives that almost all countries have adopted.Investment incentives also incarnate the conflict between developing countries and developed countries. On the one hand, developed countries arbitrarily demand developing countries abrogate their incentives, on the other hand, developed countries absolutely disregard those incentives used by themselves, which violate the rules of justice and right. So, when constituting international legal system about investment incentives, we should balance the benefit between the two style countries and establish more justice international investment law.China is the most important host country and potential home country, but its investment incentives system that has existed cannot bring into play action. In order to tally with international tidal current, China should perfect its incentive measures and increase the transparency and predictability of incentives.