A Study On The Legal Problems Of Foreign Investment Access With Negative List

Foreign investment access system is a part of the legal system of foreign investment.Foreign Investment Law refers to the regulations enacted by the host country to rule over the activities of foreign investment.It includes not only the host country’s foreign investment law as well as domestic legislations related to foreign investment,but also multilateral and bilateral investment agreements signed with other countries.Therefore,the legal sources of foreign capital access system include both domestic legislation and international treaties signed by China.The operation of the foreign investment law at this year and the keep on updating of the negative list have pushed the protection and openness of China market to a new height.However,on the road of expanding opening up and deepening industrial reform,we should also realize that there are still a considerable number of obstacles in China’s domestic industry development,domestic regulatory policies are not very sound,and China’s foreign investment access system can be improvedNational treatment before admission and negative list system are two aspects of foreign capital admission system.No country gives foreign capital comprehensive,unconditional and no exception of pre access national treatment.When giving pre access national treatment in principle,we should keep some exceptions,which are on the negative list.Developed countries rarely make unified legislation on negative list in China,such as the US,Canada and Singapore.Therefore,the negative list means a list of "nonconforming measures" in international treaties.A large sum of today’s international investment agreements refers to the American BIT model,that is,"national treatment before admission" plus "negative list".These agreements write all the chapters into a single legal text,and then list the non-compliance measures in the annex by means of negative list.The regional comprehensive economic partnership agreement(RCEP)signed by 15 countries in 2020 also reflects the above characteristics.At present,the negative list in China includes the Special Administrative Measures in pilot free trade zone and the national special administrative measures as well as the list stipulated in international treaties signed by China.In recent years,China has been modifying and improving the foreign investment access system.China’s negative list content is constantly compressed,and the expression is also becoming more transparent.In addition,China’s national security related measures for foreign investment are separated from the negative list.At present,China’s "foreign investment security review measures" has been approved by the State Council.Announced by NDRC and MOFCOM,it was implemented on January 18,2021.This also marks the formal establishment of the foreign investment national security review system in China.RCEP,as China’s first international investment agreement to make national treatment commitment before entry,expresses that China will unswervingly implement the mode of national treatment plus negative list for foreign investors,and also reflects attitude and trend of further integrating with international investment liberalization rules.While affirming the positive benefits of the negative list system,we must also realize that on the course of exploration and improvement,problems exist in China’s negative list mode.Firstly,there is a difference stands between China’s domestic negative list and international classification rules.The negative list classification is based on China’s national economic industry classification,rather than the internationally accepted WTO document of service sector classification list.The same problem will lead to the disinformation during the negotiation of investment agreements.Secondly,the negative list is over simplified,which leaves no space for decreasing during the negotiation of international investment agreements.In addition,the setting of the foreign investment access conditions is not reasonable,and the current implementation of the prohibition provisions leads to the restrictions on foreign investment.For the investors who are forbidden to invest,laws cannot provide them with remedies.Last but not least,we must aware that a lack of legal basis in the relevant laws and regulations on foreign investment access still exists,and the legal basis of the negative list is insufficient.As a significant part of the approval system,Security Review poses a comparatively low legal rank among the laws and regulations of china.It is the author’s idea that the legal system of foreign capital access can be improved in terms of access scope,access conditions and legal principles.First of all,in respect of access scope,we need to draw the negative list close to the international standards,and reserve some room for deletion in the negative list;secondly,as of the setting of access conditions,we should actively take incentive measures to meet the requirements and offer relief measures to controversy derives from foreign investment approval procedures;Last but not least,we should strengthen the legal basis of the negative list and refine measures for the security review in the area.