On The Construction Of China’s Overseas Investment Risk Reserve System

The overseas investment risk reserve system is an internationally proven and proven system for responding to overseas investment risks.Chinese companies often experience overseas investment risks in their overseas investment practices.The grim reality that overseas investment risks often cause large economic losses has seriously hindered the sustainable development of the "going out" strategy and the "the Belt and Road" strategic investment.As China has not established a more effective overseas investment risk prevention system,most enterprises are unable to resist the impact of various overseas investment risks in overseas investment activities.In order to prevent frequent overseas investment risks and guide the flow of overseas investment,China should study relevant national legislative experience to build a distinctive overseas investment risk reserve system.China’s overseas investment risk reserve system should be based on "the priority of overseas investment security,the efficiency of overseas investment".China should follow the two principles of balance of interests and institutional efficiency in building this system.In addition,drawing on international experience,China’s path to build an overseas investment risk reserve system should be stipulated in its inclusion in international investment law.The key to building an overseas investment risk reserve system is the setting of the proportion and duration of the overseas investment risk reserve.The design of the proportion and duration of the overseas investment risk reserve should be determined by reference to a variety of factors.The factors that should be referenced include the importance of the industry to which the overseas investment project belongs,the length of the period,the total amount of investment,the type and extent of the risks encountered,and the degree of fit with the national economic strategy.The main body of the risk reserve should meet certain requirements,and the source of funds should be based on the company’s own funds.China should set up multiple types of overseas investment risk reserves to deal with the complex and diverse risks of overseas investment.China should deposit this type of reserve in a specialized agency and monitor it jointly with the tax authorities to ensure earmarking.China should set up the Ministry of Investment to supervise the internal and external investment activities of enterprises,and the Ministry of Investment will lead the implementation of the system.China should set an upper limit on the proportion of overseas investment risk reserves.