浙江科技大学：《国际经济法》课程教学课件（International Economic Law）Chapter 5 Foreign-invested Enterprises

Chapter 5Foreign-lnvested Enterprises(FlE)Laws

Chapter 5 Foreign-Invested Enterprises(FIE) Laws

Teaching objectivesAfteryou'vestudiedthischapter,you'llbeabletoknow。The overview of China's foreign investment regulationsThemain existingforeign investmentforms。ThemaincontentsofForeignInvestmentLaw

Teaching objectives After you’ve studied this chapter, you’ll be able to know ◦ The overview of China’s foreign investment regulations ◦ The main existing foreign investment forms ◦ The main contents of Foreign Investment Law

Content5.1 Introduction to foreign-invested enterprise(FIEs) Laws5.2IntroductiontoEJV,CJV,WFOE5.3ForeignInvestmentlaw(FIL)

Content 5.1 Introduction to foreign-invested enterprise(FIEs) Laws 5.2 Introduction to EJV,CJV, WFOE 5.3 Foreign Investment law(FIL)

FIUOInflows declined in more than half of the top 20 recipientsForeign drect irvestmert inlows, top 20 host economies(Blions ot dolars)202320226 =2022 makingForeignDirectInvestment(FDl)United Sutes (1)311byCountrylRegionofOina2Origin(2022-2-23)Singapore (3)1Hong Kong, China (t)Accordingtothe2024WorldBul (b)InvestmentReportpublishedbyUNCTAD,Chinawasrankedthe印Cadet)world'ssecondlargestFDlrecipient足France(5)afterUnitedStatesGermany (17)Chinawasranked31outof190Mexico(12countriesintheWorld Bank's2022厦Spain (10)DoingBusinessreport,amajor日tnited Arab Emirates (2t)improvementfrom2018and2019,Top five recipients by number of projectswhen it wasranked78thand46out ofAutsla()Greanfield project announcements190.PSmeden()United States2.152United AcabEminates323口Plind(1s)tunited KingdomC184indiahdiaa)058Source:Gemany036Belgum g1)UNCTAD:Worldinvestmentreport2024Intermational project finance dealsArpertina(27)United States334Ihdonesia (ta)bttps://unctad.org/publication/worid-investment-Inda163report-2024taly116lipan(13)Spain107Cnile(25)Uhnted Xingdom104

Foreign Direct Investment (FDI) by Country/Region of Origin(2022-2-23) According to the 2024 World Investment Report published by UNCTAD, China was ranked the world's second largest FDI recipient after United States. China was ranked 31 out of 190 countries in the World Bank's 2022 Doing Business report, a major improvement from 2018 and 2019, when it was ranked 78th and 46 out of 190. Source: UNCTAD: World investment report 2024 https://unctad.org/publication/world-investment￾report-2024

China's(Mainland)TopFDISources,2023(Uss,100Million）CanadaTaiwan,ChinaFranceUnitedKingdomGermanyUnitedStatesSouthKoreaJapanSingaporeHongKong,China0.00400.00600.00800.00200.001,000.001,200.00

0.00 200.00 400.00 600.00 800.00 1,000.00 1,200.00 Hong Kong, China Singapore Japan South Korea United States Germany United Kingdom France Taiwan, China Canada China’s(Mainland) Top FDI Sources, 2023 (US$, 100 Million)

China'sTopFDISources,2014-2023(Uss,100Million)202320222021202020192018201720162015Country/Region20141,057.9899.2945.1863.9HongKong,China1,112.01,372.41,317.6963.0814.7812.798.0106.0103.376.875.952.147.660.569.058.3Singapore39.046.139.133.737.238.032.631.031.943.3Japan35.066.040.455.446.747.540.339.7SouthKorea36.136.734.022.124.723.026.926.926.523.920.923.7United States15.619.025.716.813.516.636.715.427.120.7Germany9.85.07.434.016.012.08.624.810.013.5UnitedKingdom19.025.715.427.1France16.813.516.636.715.620.77.06.69.410.015.913.919.615.420.2Taiwan, China17.75.67.56.4NA44.911.125.518.012.721.7NetherlandsNA3.97.36.56.46.04.65.52.23.4Switzerland2.01.72.02.22.32.82.92.62.23.5Canada1.51.92.22.53.7NA1.82.01.92.3ItalySource:National BureauofStatistics2024

China’s Top FDI Sources, 2014-2023 (US$, 100 Million) Country/Region 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Hong Kong, China 1,112.0 1,372.4 1,317.6 1,057.9 963.0 899.2 945.1 814.7 863.9 812.7 Singapore 98.0 106.0 103.3 76.8 75.9 52.1 47.6 60.5 69.0 58.3 Japan 39.0 46.1 39.1 33.7 37.2 38.0 32.6 31.0 31.9 43.3 South Korea 35.0 66.0 40.4 36.1 55.4 46.7 36.7 47.5 40.3 39.7 United States 34.0 22.1 24.7 23.0 26.9 26.9 26.5 23.9 20.9 23.7 Germany 19.0 25.7 16.8 13.5 16.6 36.7 15.4 27.1 15.6 20.7 United Kingdom 34.0 16.0 12.0 9.8 8.6 24.8 10.0 13.5 5.0 7.4 France 19.0 25.7 16.8 13.5 16.6 36.7 15.4 27.1 15.6 20.7 Taiwan, China 7.0 6.6 9.4 10.0 15.9 13.9 17.7 19.6 15.4 20.2 Netherlands NA 44.9 11.1 25.5 18.0 12.7 21.7 5.6 7.5 6.4 Switzerland NA 3.9 7.3 6.5 6.4 6.0 4.6 5.5 2.2 3.4 Canada 2.0 1.7 2.0 2.2 2.3 2.8 2.9 2.6 2.2 3.5 Italy NA 1.5 1.8 2.0 1.9 2.3 1.9 2.2 2.5 3.7 Source: National Bureau of Statistics,2024

FDIForeigndirect investment(FDl)isacategoryofcross-border investmentinwhichan investor resident inoneeconomy establishes alastinginterest inand a significant degree of influenceover anenterpriseresidentinanothereconomy.Generally,ownershipof10percentormoreofthevotingpowerinanenterpriseinoneeconomybyaninvestorinanothereconomyisevidenceofsucharelationshipFDlisakeyelementininternationaleconomicintegrationbecauseitcreatesstableandlong-lastinglinksbetweeneconomies.FDlisanimportantchannelforthetransferoftechnologybetweencountries,promotesinternational tradethrough accessto foreignmarkets,and canbean importantvehicleforeconomicdevelopment.Theindicatorscovered inthisgroup are inwardandoutwardvaluesforstocks,flowsandincome,bypartnercountryandbyindustryandFDlrestrictiveness

FDI Foreign direct investment (FDI) is a category of cross-border investment in which an investor resident in one economy establishes a lasting interest in and a significant degree of influence over an enterprise resident in another economy. Generally, ownership of 10 percent or more of the voting power in an enterprise in one economy by an investor in another economy is evidence of such a relationship. ◦ FDI is a key element in international economic integration because it creates stable and long-lasting links between economies. FDI is an important channel for the transfer of technology between countries, promotes international trade through access to foreign markets, and can be an important vehicle for economic development. The indicators covered in this group are inward and outward values for stocks, flows and income, by partner country and by industry and FDI restrictiveness

5.1lntroductiontoFIELawsinChinaOverviewofChina'sFIElawsSincethelate1970's Chinadecidetoimplementthepolicy ofeconomicreformandopen-uptotheoutsideworld,theforeigninvestmenthasobtainedconstitutionalauthorizationandprotection.ConstitutionArticle18ThePeople'sRepublicofChinapermitsforeignenterprises,otherforeign economic organizations and individualforeigners to invest in Chinaand to enter intovariousformsofeconomic cooperationwithChineseenterprisesandotherChineseeconomicorganizationsinaccordancewiththelawofthePeople'sRepublicofChina.Allforeignenterprises,otherforeigneconomicorganizationsaswellasChinese-foreignjointventureswithinChineseterritoryshallabidebythelawofthePeople'sRepublicofChina.Theirlawfulrightsand interestsareprotectedbythelawof thePeople'sRepublicofChina.Chinahadmaintainedaseparatelegalframeworkforforeign-investedenterprises (FIEs),whichconstitutes anintegral partand increasingimportantfactorinChina'sinvestmentclimate

5.1 Introduction to FIE Laws in China Overview of China’s FIE laws Since the late 1970’s China decide to implement the policy of economic reform and open-up to the outside world, the foreign investment has obtained constitutional authorization and protection. Constitution Article 18 The People's Republic of China permits foreign enterprises, other foreign economic organizations and individual foreigners to invest in China and to enter into various forms of economic cooperation with Chinese enterprises and other Chinese economic organizations in accordance with the law of the People's Republic of China. All foreign enterprises, other foreign economic organizations as well as Chinese-foreign joint ventures within Chinese territory shall abide by the law of the People's Republic of China. Their lawful rights and interests are protected by the law of the People's Republic of China. China had maintained a separate legal framework for foreign-invested enterprises (FIEs), which constitutes an integral part and increasing important factor in China’s investment climate

FIElawsin1980s--2020ThereweremainlythreelawsregulatingFIEsinChinaduringthepast20.40 years(until 2020):。theLawofthePeople'sRepublicofChinaonChinese-foreignEquityJointVentures(TheEJVlaw),promulgatedin1979.ThefirstlawregulatingFIEsamendedin2001;theLawofthePeople'sRepublicofChinaonChinese-ForeignContractualJointVentures(TheCJVLaw),promulgated in 1988,amended in2001.theLawofthePeople's Republicof ChinaonWhollyForeign-ownedEnterprises(TheWFoELaw),promulgatedin1986,amendedin2001.Theabove three laws are collectively referredto as“threeForeign-fundedEnterpriseLaws"EvenearlierthanCompanylaw,whichwaspromulgatedin1993

FIE laws in 1980s-2020 There were mainly three laws regulating FIEs in China during the past 20- 40 years(until 2020): ◦ the Law of the People's Republic of China on Chinese-foreign Equity Joint Ventures(The EJV law), promulgated in 1979. The first law regulating FIEs, amended in 2001; ◦ the Law of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures(The CJV Law), promulgated in 1988, amended in 2001. ◦ the Law of the People's Republic of China on Wholly Foreign-owned Enterprises(The WFOE Law), promulgated in 1986, amended in 2001. The above three laws are collectively referred to as “three Foreign￾funded Enterprise Laws” Even earlier than Company law, which was promulgated in 1993

TheneweraforforeigninvestmentinChinaFILin2020oAsChinahasbeenmovingtofurtheropenitsmarketandlevel theplayingfieldforforeignbusinessescompetingwithdomesticprivatefirms and state-owned enterprises, a newlawwas promulgated in 2019andtook effectatthebeginningof2020.OnJanuary1,2020,theForeignInvestmentLawofthePeople'sRepublicofChina(FIL),whichChina'sStateCouncilenactedonMarch15,took effect.Onthesame day,several related regulations andnotices,whichwereissuedattheendof2019,alsotookeffect.ThenewFiLand relatedregulationsmarkthebeginningof aneweraforforeigninvestmentinChina

The new era for foreign investment in China—FIL in 2020 ◦ As China has been moving to further open its market and level the playing field for foreign businesses competing with domestic private firms and state-owned enterprises, a new law was promulgated in 2019 and took effect at the beginning of 2020. ◦ On January 1, 2020, the Foreign Investment Law of the People’s Republic of China (FIL), which China’s State Council enacted on March 15, took effect. On the same day, several related regulations and notices, which were issued at the end of 2019, also took effect. The new FIL and related regulations mark the beginning of a new era for foreign investment in China