Thoughts On Reform And Improvement Of Foreign Investment Legislation In China

After 30 years of research and practice, the foreign investment law system has been established on the core of Foreign-funded Enterprises Law. Apparently, improvement of the laws and regulations of these foreign investment laws, especially before and after China’s accession to WTO in 2001, has created a great legal environment for China to attract and use foreign capital. However, with the burst of financial crisis in 2008, rapid changes including harsh international investment environment, more competitive in international investment and establishment of a new international economic order, have taken place in politics, economy and culture both in home and abroad. As we all know, the Foreign-funded Enterprises Law is the product of early stage of reform and opening up in China. As China now steps into the new era of comprehensively deepen reforms and faces new challenges and difficulties, the existing foreign investment law system obviously cannot meet the investment needs both in domestic and overseas. In addition, it cannot cope with the changes in international investment rules, and it has so many issues in its setting and legal system. Therefore, reform and improvement of foreign investment legislation is extremely urgent.Before conducting research of this article, regarding problem of foreign investment legislation reform and improvement, most of experts and scholars suggest that a complete Foreign Investment Law or Foreign-country Investment Law be formulated to enhance and reform the existing foreign investment law. They think on the basis of combining the development characteristics of foreign-invested enterprises and requirement for Foreign Investment Law in China, a complete foreign investment law can offset the drawbacks of the two-track legislative model, create more stable, transparent and predictable legal environment for foreign investment and boost development of market economy in China. At the same time, State Department of Commerce announced the Foreign Investment Law(draft) in January, 2015.The author believed that in matter of reform and improvement for foreign investment in China, not only the Foreign-funded Law but also the foreign and domestic investment law should be merged together to form one complete investment law that fit for both domestic and foreign investors. Only by doing this, the unity of domestic and foreign investment legislation can be eventually realized, and the goal to reform the foreign investment law, which is to unite domestic and foreign laws and regulations and maintain stable, transparent and predictable foreign capital policy, can be achieved.This paper is divided into three parts. The first part narrates the current situation and its main problems of foreign investment legislation in China. In the first place, it depicts the current situation of the existing foreign investment legislation. Then, it point out three defects: conflict, outdated and complexity. Thus, it is necessary to reform and improve the foreign investment legislation in China. The second part describes variety of thoughts about foreign investment legislation reform and improvement in China, including suggestions from educational circles and government practices. The third part is about the author’s thinking about the foreign investment legislation reform and improvement in China, that is to formulate a unite investment law which suit to both domestic and foreign investors because it now possesses the possibility to carry out the deeds.