Research On The Legal Issues Of Political Risk Of Chinese Overseas Investment Under Public-Private Partnership(PPP) Model

In the context of China's opening up policy and China's proposal to build the "One Belt And One Road" initiative,Chinese investors are participating in more and more PPP projects cooperated with foreign governments.Chinese investors are faced with political risks,commercial risks and other risks during the operation of overseas PPP projects.In the practice of overseas investment,in foreign-related PPP projects,nongovernmental investors can avoid or control commercial risks by analogy with its business practice experience in China,while political risks are uncontrollable for nongovernmental investors.Although the government will generally make "governmental guarantee" to political risk in the risk sharing clauses of PPP projects contracts,the degree of government guarantee is inversely proportional to the return on investment of PPP projects.In order to achieve a higher rate of return on investment,nongovernmental investors may reduce their demands on the degree of governmental guarantee.Therefore,it seems that the governmental guarantee has limited mitigation effect on the political risk for nongovernmental investors,which is the main reason for the early termination of the project.Through the analysis of the PPP related laws and regulations,the PPP project political risk is risk mainly caused by government action by the government exercising its administrative right of superiority,so,from the perspective of the government behavior,the political risk also can be summarized as the risk that the government unilateral modifies or terminates the contract,and the resulting risk of expropriation and similar measures.However,the starting conditions for political risk to the disadvantage of the nongovernmental investors merely states in principle that "for the sake of public interest",and there were no specific procedural provisions and substantive conditions to restrict the administrative superiority and interest rights of the government.Based on the analysis and reference of the experience outside the region,this paper solves this problem and puts forward the following Suggestions from the perspective of nongovernmental investors,host country and investor home country.From the perspective of nongovernmental investors,we should improve the foreign-related PPP project contract to prevent risks,such as arranging "fixed review mechanism" and embedding "variable terms" in the contract.From the perspective of the host country,the PPP legislation should be perfected,the administrative power of the government should be restrained,and the cooperation status between the host government and the PPP project company should be maintained.From the perspective of the investor's home country,the PPP legislation should be improved correspondingly according to the principle of reciprocity to constrain the administrative power.In addition,an effective risk transfer mechanism should be established,including the establishment of overseas investment insurance system,the improvement of overseas investment insurance system of the investor's home country and the cooperation with the international community.