Study On Legal Countermeasures Of Abnormal Withdrawal Of Foreign Investment In China

At the present stage, the phenomenon of abnormal withdrawal of foreigninvestment occur repeatedly in China. This phenomenon has been emerging since lastcentury and the global financial crisis has intensified it. Currently, as a whole, theworld economy has come into the post-crisis recovery period. Apparently, thisphenomenon has moderated. But, the factors that affect this phenomenon are still exist.Instability of the world economy is likely to lead to anther large scale outbreak of.abnormal withdrawal of foreign investment. Abnormal withdrawal of foreigninvestment cause heavy losses to Chinese stakeholders and it brings negativeinfluence on China’s opening-up and foreign-capital-utilization. It raises widespreadconcern from each parts of our society, and it’ s the research on its legalcountermeasures has become a hot issue.To cope with abnormal withdrawal of foreign investment,on December thenineteenth,2008,the ministry of commerce, the ministry of foreign affairs, the ministryof pubic security and the ministry of justice jointly issued a legal document calledGuidelines for Chinese stakeholders do transnational investigation and litigation workwhen abnormal withdrawal of foreign investment occurrence (hereinafter referred toas Guidelines). This is for the first time for China to introduce special regulation toprovide guidance to Chinese stakeholders to investigate foreign investors’ legalliabilities in transnational way after abnormal withdrawal of foreign investmentoccurrence. However, Guidance does not really play a role. It is very difficult toinvestigate legal liabilities and to do litigation work for abnormal withdrawal offoreign investment cases. Guidance has made little success.This paper puts forward legal countermeasures to deal with abnormal withdrawalof foreign investment in China through the study of abnormal withdrawal of foreigninvestment. The legal countermeasures are combine early prevention withpost-processing to deal with abnormal withdrawal of foreign investment in China. This paper divides into three parts to discuss abnormal withdrawal of foreigninvestment and puts forward legal countermeasures to deal with abnormal withdrawalof foreign investment in China.The first part draws forth the phenomenon of abnormal withdrawal of foreigninvestment. Through discussing the phenomenon of abnormal withdrawal of foreigninvestment, this paper raises different cases of abnormal withdrawal of foreigninvestment. It is not only includes the type of “midnight escape” abnormalwithdrawal, which is generally recognized by academia, but also includes the type of“approaching market” abnormal withdrawal, the type of large-scale abnormalwithdrawal. The paper discusses the main reasons that influence abnormal withdrawalof foreign investment are the deficiency of foreign investment law. This leads to theoccurrence of the type of “midnight escape” abnormal withdrawal and thedeficiency of legal regulation on abnormal withdrawal of foreign investment.The second part analyses the deficiency of dealing with abnormal withdrawal offoreign investment after abnormal withdrawal of foreign investment occurrence fromthe angle of Guidelines and discusses the reasons why post-processing makes littlesuccess. This part also discusses legal countermeasures of abnormal withdrawal offoreign investment should pay attention to the combination of early prevention withpost-processing. In addition, this part stresses on legal countermeasures of abnormalwithdrawal of foreign investment should pay attention to play the role of thecommercial arbitration.The third part is the focus of this paper. This part puts forward legalcountermeasures to deal with abnormal withdrawal of foreign investment in China.These countermeasures include two aspects. Firstly, improving legal countermeasuresof early prevention of abnormal withdrawal of foreign investment. Secondly,improving legal countermeasures of post-processing of abnormal withdrawal offoreign investment.This paper puts forward legal countermeasures of improving legalcountermeasures of early prevention of abnormal withdrawal of foreign investmentfrom four aspects. The first, improving domestic foreign legal system. The second, improving international foreign legal system which centered on bilateral investmenttreaties. The third, pre-establishing risk rating system. The fourth, playing the role ofthe commercial arbitration in dealing with abnormal withdrawal of foreigninvestment.This paper raises legal countermeasures of improving post-processing ofabnormal withdrawal of foreign investment from the angle of playing the role of courtand commercial arbitration. Legal countermeasures of improving post-processing ofabnormal withdrawal of foreign investment include three aspects. Firstly, playing therole of court in dealing with disputes caused by abnormal withdrawal of foreigninvestment. Secondly, improving the commercial arbitration system in China so as toattracting foreign investors to submit abnormal withdrawal of foreign investmentdisputes to domestic commercial arbitration institutions. Thirdly, in case of both sidesof the parties selecting the foreign arbitration institutions to resolve disputes, bydiscussing factors affecting Chinese parties selecting arbitration institutions to settleabnormal withdrawal of foreign investment disputes and issues that should be paid toattention when Chinese stakeholders selecting arbitration institutions, providingadvice for Chinese stakeholders to select foreign arbitration institutions.