An Analysis Of The Tmplication Of Expropriation On Compensation Standard In China's Foreign Investment Law

At present,China's compensation standard for foreign investment,usually known as Fair Market Value(FMV),is regulated in a two-tier model of domestic legislation and bilateral or multilateral investment agreements.However,FMV is ambiguity and lacking of operability.It is necessary to make a new interpretation to meet the needs of China's current national interests.After researching most of the international multilateral treaties and representative arbitration cases,the author believes that the "Hull Principle" and"Appropriate Compensation" based on the contradictory perspective of the developed and the developing countries have shown a trend from complete opposition to mutual integration.In addition,China's status has also changed from the traditional single role of the investment host country to a compatible one.What even more urgent is to strengthen the protection of overseas investment of Chinese enterprises,because large of direct expropriation to foreign investment occurred in overseas instead of domestic area.In order to keep line with international prevailing rules and adapt to Chinese identity transformation,the author contends that FMV should be interpreted as a revised "Hull Principle",which is more in line with China's national interest in international investment issues.Except for the preamble and conclusion,the article structure consists of four parts.Part one is the evolution of the international law on expropriation compensation standards.First,I analyze the conditions of lawful expropriation and distinguish the different results caused by legal and illegal expropriation.Secondly,from the perspective of investment state and host state,introduce the opposition of two traditional compensation standards,namely the "Hull Principle" and the "Appropriate Compensation Principle".Finally,I tried to summarize the evolution of compensation standards from universal multilateral treaties and international arbitration cases,looking for the existence of general international customary law.Part two is the calculation methods of compensation.This section introduces the current compensation methods commonly used in the international community,mainly recommended by the World Bank in its "Guidelines on the Treatment of Foreign Direct Investment",in addition to the specific applicable methods in international arbitration cases.The third part is the historical evolution of China's expropriation compensation standards.Any research that ignores the actual issues of its own country is meaningless,so this part switches the perspective to our country's provisions and find out the problem existed in current law,that is,fair and reasonable standards is still vague and needs to be further explained in the relevant implementation regulations and practices.The fourth part is to explore the meaning of fair and reasonable standards.The purpose of this part is to elaborate own opinions and demonstrate the problems raised in part three.Based on the analysis of legislative purpose of China's "Foreign Investment Law",the meaning of market rules,and the international rules elaborated in the first part thereof,it is concluded that the fair and reasonable standards should be interpreted as equivalent to the Hull principle.Finally,I analyze the possible challenges and related solutions.The research methods adopted in this essay are as follows:First,Historical Analysis.that is,sorting out the evolution process of the expropriation compensation standards at the two-tier of international customary law and domestic law in China.Second,Empirical Analysis.through the analysis of the representative cases of international arbitral tribunals such as ICSID,PCIJ,SADC,etc.,to study the application in international arbitration practice.These cases such as ADC v.Hungary.Campell v.Zimbabwe,Chorzow Factory,LIAMCO v.Libya,and Metalclad v.Mexico.Third,Comparative Analysis.which is to compare the differences between different systems in domestic and international,developed and developing countries.Lastly.Normative Analysis,that is,through analysis of the important normative documents in the current international law and relevant domestic laws of China,discussing the rules of compensation standards.Including but not limited to:"Articles on Responsibility of States for Internationally Wrongful Acts ","Charter of Economic Rights and Duties of States ","Draft United Nations Code of Conduct on Transnational Corporations ","Multilateral Agreement on Investment",etc.The innovation could be found by two dimensions.First,scholars in the past have adopted a flexible approach to the illustration of FMV or regarded fair and reasonable standards as a principle that takes both the interests of host state and investors into account,which is a independent rule different from the Hull Principle either the Appropriate Compensation Principle.The author believes that based on China's status changed in investment and the actual situation of domestic expropriation for foreign capital,it is more in line with China's national interests to interpret fair and reasonable standards leaning to the Hull principle.Second,The follow-up challenges posed by this interpretation are analyzed and the countermeasures are proposed at the end of the essay.