A Study On Sino-American BIT And Its Influence On Sino-American Mutual Direct Investment

In the course of attracting foreign direct investment in China, American direct investment in China played an important role. But in recent years, the proportion of American direct investment in China accounting for all foreign direct investment in China tends to fall continuously. The reason is that the focus of American direct investment abroad has been transferred from manufacturing to service industry, and due to Chinese service industry is relatively not open, the foreign investment to enter Chinese market has certain access restrictions. At the same time, the investment of Chinese enterprises in America has been developing rapidly in recent years, but meanwhile encountering national security review in America. Now there is a certain of investment barriers in both sides, and the proportion of direct investment in the other countries accounting for all foreign direct investment is low, so the growth potential is huge. In this context, the two sides launched bilateral investment treaty (BIT) negotiation in order to break investment barriers between two sides in 2008. In 2013 China agreed to negotiate with America on the basis of "pre-establisliment national treatment plus negative listing" mode, then the negotiation moved quickly. In 2014 the two sides entered text negotiation stage, and now has completed the text negotiation and entered the phase of exchange of negative list. Once negative listing negotiation ends, it means that BIT negotiation between China and America will be completed soon. At the same time of BIT negotiation, China is adjusting the structure of domestic economy and opening wider to the outside, and America is pushing re-industrialization strategy after the financial crisis and trying every means to attract foreign investment. These domestic economic factors not only promote BIT negotiation, but also laid a solid foundation for BIT’s influence on direct investment between the two countries.The study of Sino-American BIT and its influence on mutual direct investment between China and America has a great significance. First of all, based on economic development level and domestic economic strategies of China and the United States, Sino-American BIT are not just a simple investment agreement, it will produce an influence similar to that of China’s accession to the WTO, making the opening level of Chinese market rise greatly and giving American investors more opportunities. At the same time, the attitude of the United States to Chinese investors will be more active. Chinese enterprises will be able to gain more advantageous position in the United States; Secondly, as an important country in both investing abroad and attracting investment, the United States set topics in its BIT model which represent development trend of international investment rules, so Sino-American BIT negotiation will also have a significant impact on international investment rules. In the process of research, this paper refer to a large number of documents and materials and conduct a systematic and in-depth research on Sino-American BIT and its influence on mutual direct investment between China and the United States, mainly using the method of qualitative analysis and normative analysis.The content of this paper is divided into five parts, as follows:The first part is introduction. First of all. the paper analyzes the current situation of mutual direct investment between two countries, the necessity of BIT negotiation and the meaning of the research of this paper; Next this paper reviews the related literatures on Sino-American BIT negotiation and mutual direct investment between two countries; Finally, this paper introduces the research methods, the structure of the arrangement, innovation point and deficiency. The second part is the basic progress and focus problems of BIT negotiation between China and the United States. First of all, this paper introduces the basic progress of BIT negotiations between China and the United States; Secondly this paper analyzes the core issues of 2012 U.S. BIT model:Finally this paper analyses the focus of the two sides in the BIT negotiation respectively. The third part is Sino-American BIT’s influence on Chinese direct investment in the United States. Firstly this paper analyzes American current two complementary strategies, re-industrialization strategy and innovation strategy. Secondly this paper analyzes Sino-American BITs expected effects on American investment environment. Finally with the combine of the analysis of American economic strategy, Sino-American BIT will bring to Chinese companies in the United States some investment opportunities. The fourth part is Sino-American BIT"s influence on American direct investment in China. Firstly this paper analyzes the strategies of Chinese current economic transformation. Secondly this paper analyzes Sino-American BIT’s expected effects on Chinese investment environment. Finally with the combine of the analysis of the strategy of Chinese economic transformation, Sino-American BIT will bring to American companies in China colorful investment opportunities. The fifth part is conclusion and suggestion.This paper’s innovation points lie in two aspects. Firstly this paper argues that the study of Sino-American BIT and its influence on Sino-American mutual direct investment must be based on domestic economic strategies in China and the United States. We must first study domestic economic strategy and then analyze Sino-American BIT’s influence on investment environment and enterprises on this basis. Secondly, this paper classifies Sino-American BIT’s effect on Sino-American mutual direct investment into two parts, investment environment and enterprises’investment opportunities. The influence to investment environment is mainly the direct result of Sino-American BIT, and Sino-American BIT’s influence on enterprises" investment opportunities is a combination of the two factors, domestic economic strategies in two countries and Sino-American BIT"s influence. This paper’s deficiencies lie in two points. Firstly, due to Sino-American BIT is negotiating, no historical data can be gained to analyze the quantitative effects of Sino-American BIT; Secondly; the analysis of the enterprise’s investment opportunities is based on the macroscopic judgment of economic strategies, lacking analysis on the enterprise operating level.