On The Improvement Of China's Overseas Investment And Political Risk Prevention Mechanism

Since the policy of reform and opening-up was carried out, more and more Chinese enterprises have been investing abroad, especially after 1990s the number of overseas investment companies and overseas capital are growing at a remarkable rate, reaching the world average. However risk is threatening Chinese overseas investment and the political risk in particular is imposing more influence, not only because it is hard to evaluate, forecast and prevent the political risk, but also because political risk's great influence and destructive power affect Chinese overseas investment, the whole economic policy and the security of diplomacy. With the development of M&A, our country's overseas investment will step into a fast-going stage. No matter caring about the country's benefit or the overseas investment companies', we should pay more attention to political risk. Whereas Chinese enterprises are familiar with commercial risk and they pay close attention to it when they conduct overseas investment, they have little knowledge about political risk and don't have the sense to guard against political risk. So I compose this dissertation to analyze the connotation of overseas investment and political risk, to define political risk as one possibility of being damaged occurs on overseas investment when the host country issues some acts, bursts into wars, riots or religion conflicts, or something alike happens. Secondly I present some political risk prevention mechanisms in the world, and narrate the particulars of overseas investment insurance legal system and MIGA. Thirdly I elaborate the current situation of Chinese overseas investment and the political risk they have met to make it clear that we have to perfect our country's political risk prevention mechanism. Fourthly 1 make complete treatment of the going mechanisms against political risk in our country, and point out the defects or imperfections. Then in the fifth part of the dissertation, borrowing other countries' tricks, I put forward some suggestions on how to perfect our country's political risk prevention mechanism, in detail, we should establish and strengthen the evaluation and early warning mechanism, improve the overseas investment insurance legal system and bilateral investment insurance agreements, and set up the coordination mechanism about overseas investment. How to prevent the political risk is really a key problem we have to deal with when we carry out overseas investment, and it is also a basic one to keep the overseas investment going smoothly. I choose this subject and just want to catch someone's attention, such as the governmental agencies, overseas investment companies and academic world. Helping those overseas investment companies enhance political risk prevention consciousness, guard against and defuse political risk, improve the strain capacity and competitive power are what I am ready to do.