Study Of Political Risks Treatment In The Area Of International Investment From Legal Perspectives

With Chinese capital going global, Chinese enterprises pay more and more attention to the overseas investment security. However, in recent years, China’s investment in Iraq, Libya, Syria and other countries suffered heavy losses because of political risks. In May 2014, due to the dispute in South China Sea between China and Vietnam, violence against Chinese-invested enterprises occurred in Vietnam, causing serious damages and losses to Chinese-invested enterprises. Facing the violence, there was a serious lack of the obligation to protect enterprises in Vietnamese governments, and the insurance works later were also not in time. The author in this thesis will study the source of risk of this incident, and to find out the root cause of such problems.Political risks are caused by political differences among countries and shall be solved by political means, but not to infringe the legal rights and interests of the investment of home countries. When the conduct of host countries violates the relevant provisions of international investment laws, the law must play its functions and remedy the losses caused by political risks. The national government or insurance agencies in the home country can adopt the insurance mechanism to timely and effectively compensate the enterprises suffering losses in the host country, and then raise claims for compensation against the host country, by using the right of subrogation under provisions of bilateral investment treaty signed between home country and host country.At present, there are some legal problems in our domestic laws and bilateral investment treaties signed with other countries. The author in this thesis will thoroughly discussed those problems and seeks new mode of bilateral investment treaty together with overseas investment insurance scheme, creating effective legal protection mechanisms to political risks.