The Research On The Legal Prevention Of Political Risk Of Chinese Overseas Investment

Recently, domestic investors have invested plenty of funds overseas and achieved unprecedented achievement. On one hand, it owes to China’s overall increased economic development; on the other, it is also inseparable from the national policy. After the formulation of the 13th Five-Year plan, investing abroad becomes entrepreneurs’favorite economic choice. However, overseas investment is much more complex compared with domestic investment, facing more complicated and uncontrollable risks; among which political risk in particular, constitutes a major obstacle for investors, and bring huge risks and hidden dangers for investors. To prevent political risk of overseas investment and to promote the overseas investment is a result of combination of various forces, and improving related legal system is definitely one of the most important measures.At present, the improvement of domestic economy results in the increase of the overseas investment, as well as enhancement of investors’ability. Under the national policy, the investors could adjust their mode of investment, project and region. However, for overseas investment, the uncertainty of political behavior of host country is also very obvious. China’s overseas investors cannot bear too much political risk, as they encounter investment obstacles, such as project being condemned, revenue is prohibited or restricted from flowing, being treated unfairly under the excuse of national security, investors may lose the possibility of operating and suffer huge losses. To enhance Chinese overseas investors’ability of, bearing political risks, apart from strengthening the insurance system, we should lay more emphasis on making full use of bilateral investment treaties and multilateral investment guarantee agency. At present, our country’s insurance system of the protection mode is not conducive to the realization of the right of subrogation, due to lack of high-level legislations, and inadequate insurance agency. With regard to the bilateral investment treaties, some countries do not have bilateral investment promotion and protection agreements protection, and the content is incomplete. At the same time, few projects are invested in the strategic priority field of the multilateral investment guarantee agency, which result in few insurance applications. This series of problems have weakened the national protection of overseas investment, therefore, this article puts forward the following suggestions mainly from the view of perfecting the domestic and overseas investment insurance system, making full use of bilateral agreements and multilateral conventions:Firstly, setting up China’s overseas investment legislation system, supervising agencies for approval authority, and the existing insurance institutions, to cooperate with each other and promote institutions; perfecting training system, early warning system, collaborating with the insurance systems. Secondly, China should formulate our own bilateral agreement template, making full use of the BITs, and ensure that signed BITs are executed. Finally, raising awareness of and participation to MIGA and strengthening the cooperation with developing countries under the MIGA regime.