Introduction

Ⅰ European Investment in China: Past History and Present Situation

1.1 Nationalisation (1949-1957)

1.2 Exclusion (1958-1977)

1.3 Resumption (1978-1992)

1.4 Rapid Increase (1993-1999)

1.5 Further Development (2000-)

Ⅱ The Role of Law in the Development of EU Investment in China

Ⅲ Existing Research on the Law of EU Investment in China

Ⅳ This Book: Purposes, Scope and Research Methods

Ⅳ.1 Purposes

Ⅳ.2 Structure

Ⅳ.3 Definitions

Ⅳ.4 Research Methods

Ⅳ.4.1 The Questionnaire

Ⅳ.4.2 The Interviews

Part Ⅰ The Current Legal Framework of EU Investment in China: The Components

1 Chinese Law on Inward Investment

1.1 The 'Opening-up' Policy and Foreign Investment Law Making in China

1.2 The Current Chinese Foreign Investment Law System

1.2.1 Composition of the Current Chinese Foreign Investment Law System

1.2.1.1 Constitutional Provisions

1.2.1.2 National Laws and Regulations

1.2.1.3 Sub-National Regulations

1.2.2 The Features of the Current Chinese Foreign Investment Law System

1.3 The Principal Forms of Investment

1.3.1 Equity Joint Venture (EJV)

1.3.2 Contractual Joint Venture (CJV)

1.3.3 Wholly Foreign Owned Enterprise (WFE)

1.3.4 Joint Exploitation (JE)

1.3.5 New Forms of Foreign Investment

1.3.5.1 Build-Operate-Transfer (BOT)

1.3.5.2 Stock Company with Foreign Investment (SCFI)

1.3.5.3 Holding Companies with Foreign Investment (HCFI)

1.3.5.4 Merger and Acquisition (M&A)

1.4 Recent Amendments to Major FDI Laws in China

1.4.1 Background to the Amendment

1.4.2 The Changed Rules

1.4.3 An Evaluation of the Amendments

1.5 Further Reform of the Chinese FDI Law System

1.5.1 A Unified FDI Code

1.5.2 A Universally Applied Company Law

1.5.3 An FDI Code plus a Universally Applied Company Law

1.6 Conclusion

2 EU Law on Outward Investment

2.1 The EU's External Investment Competence

2.1.1 The Existence of EC's External Investment Competence

2.1.1.1 Express Competence

2.1.1.2 Implied Competence

2.1.2 The Exclusivity of the EC's External Investment Competence

2.1.2.1 Exclusivity by the Treaty

2.1.2.2 Exclusivity by Nature

2.1.2.3 Exclusivity by Measures Adopted and Exclusivity by Acts

2.2 EU Law and Practice on Outward Investment

2.2.1 The EC Treaty

2.2.2 EU Policies and Measures on Outward Investment

2.2.2.1 General Policy: From the 1972 Proposal to the 2000 Approach

2.2.2.2 Unilateral Measures: From ECIP Facility to Asia Invest Programme

2.2.3 Community Practice in Concluding International Investment-Related Agreements

2.2.3.1 Bilateral Agreements

2.2.3.2 Multilateral Agreements

2.3 EU Member State Law on Outward Investment

2.3.1 The Liberalisation of Outward Investment within EU Member States

2.3.1.1 The OECD Codes of Liberalisation

2.3.1.2 The OECD Declaration on International Investment and Multinational Enterprises

2.3.2 The Promotion of Outward Investment in EU Member States

2.4 Towards a Common Community Investment Policy

2.5 Conclusion

3 International Law Governing EU Investment in China

3.1 Sources of International Law Governing EU Investment in China

3.1.1 International Treaties

3.1.2 Customary International Law

3.1.3 General Principles of Law

3.1.4 Judicial Decisions

3.1.5 Writings of Publicists

3.1.6 United Nations General Assembly Resolutions

3.1.7 'Soft' Law

3.2 Applicable International Treaties on EU Investment in China

3.2.1 Bilateral Agreements

3.2.1.1 The 1985 EC-China Co-operation Agreement

3.2.1.2 Bilateral Investment Treaties between China and EU Member States

3.2.2 Multilateral Agreements

3.2.2.1 ICSID Convention

3.2.2.2 MIGA Convention

3.2.2.3 WTO Agreement

3.2.3 An Assessment of the Applicable International Treaties

3.3 The Interaction between International Treaties and Chinese Law

3.3.1 The Relationship between International Treaties and Municipal Law

3.3.2 The Reception of International Treaties within the Chinese Legal System

3.3.3 The Direct Applicability of International Treaties by Chinese Courts

3.4 Conclusion

3.5 Conclusion of Part Ⅰ

Part Ⅱ The Current Legal Framework of EU Investment in China: Substantive Issues

4 Admission

4.1 Admission of Foreign Investment under General International Law

4.2 Admission of EU Investment in China under International Treaties

4.2.1 EU-China BITs

4.2.2 WTO Agreement

4.2.2.1 TRIMs Agreement

4.2.2.2 GATS

4.2.3 Summary

4.3 Admission of EU Investment in China under Chinese Law

4.3.1 Approval Procedures

4.3.1.1 Approval Authorities

4.3.1.2 Approval Process

4.3.1.3 Summary

4.3.2 Investment Directions

4.3.2.1 Investment Guidance and the Catalogues

4.3.2.2 Observations

4.3.3 Performance Requirements

4.3.3.1 Local Content Requirements

4.3.3.2 Export Performance Requirements

4.3.3.3 Foreign Exchange Balance Requirements

4.3.3.4 Technology Transfer Requirements

4.3.3.5 Local Employment Requirements

4.3.3.6 Compulsory Joint Venture Requirements

4.3.3.7 Special Performance Requirements on Services Investments

4.3.3.8 Observations

4.3.4 Summary

4.4 Conclusion

5 Standards of Treatment

5.1 Standards of Treatment of Foreign Investment under General International Law

5.2 General Standards of Treatment of EU Investment in China under International Agreements

5.2.1 Fair and Equitable Treatment (F&E)

5.2.2 Most-Favoured-Nation Treatment (MFN)

5.2.2.1 MFN Clauses in EU-China BITs

5.2.2.2 MFN Clause in the GATS

5.2.3 National Treatment (NT)

5.2.3.1 NT Provisions in EU-China BITs

5.2.3.2 NT Provision in the GATS

5.2.4 Non-Discrimination Treatment (ND)

5.2.5 More Favourable (Preferential) Treatment

5.3 Treatment of EU Investment in China under Chinese Law

5.3.1 Non-National Treatment for Foreign Investment

5.3.1.1 Inferior-National Treatment

5.3.1.2 Superior-National Treatment

5.3.1.3 Is the Existing Non-National Treatment Fair and Equitable?

5.3.2 Implementing National Treatment for Foreign Investment in China

5.3.2.1 The Conditions

5.3.2.2 Progress and Prospects

5.4 Transfer

5.4.1 Transfer under EU-China BITs

5.4.1.1 Types of Payments Covered

5.4.1.2 Currency Convertibility and Exchange Rate

5.4.1.3 Restrictions and Limitations on Transfer

5.4.2 Transfer under Chinese Law

5.4.2.1 Repatriation of Foreign Investments and Returns

5.4.2.2 Currency Convertibility and Exchange Rate

5.5 Conclusion

6 Expropriation and Compensation

6.1 Expropriation and Compensation under International Law

6.1.1 The 'Traditional' Rule

6.1.2 Challenges to the 'Traditional' Rule

6.1.3 Efforts to Create a New Rule

6.1.4 BIT by BIT: Has the Proliferation of Investment Agreements Constituted a Complete Reversal to the 'Traditional' Rule?

6.2 The Law of Expropriation and Compensation of EU Investment in China

6.2.1 Chinese Law

6.2.2 The EU-China BITs

6.2.2.1 The Constitution of Expropriation

6.2.2.2 Conditions of Expropriation

6.2.2.3 Compensation for Expropriation

6.3 Conclusion

7 Settlement of Disputes

7.1 Settlement of Investment Disputes

7.2 Settlement of Investment Disputes under EU-China BITs

7.2.1 Jurisdiction

7.2.1.1 Domestic or International Jurisdiction

7.2.1.2 International Arbitration and the Use of ICSID

7.2.2 Applicable Law

7.2.3 Summary

7.3 Settlement of Investment Disputes under the ICSID Convention

7.3.1 Jurisdiction

7.3.2 Applicable Law

7.3.3 Summary

7.4 Settlement of Investment Disputes under Chinese Law

7.4.1 Administrative Reconsideration and Litigation

7.4.2 Recent Cases

7.5 Subrogation and Investment Insurance

7.5.1 Subrogation under EU-China BITs

7.5.2 Investment Insurance under MIGA Convention

7.5.2.1 Scope of Covered Risks

7.5.2.2 Eligibility Requirements

7.5.2.3 Subrogation

7.5.2.4 Summary

7.5.3 Investment Insurance Provided by the People's Insurance Company of China (PICC)

7.6 Conclusion

7.7 Conclusion to Part Ⅱ

Part Ⅲ The Current Legal Framework of EU Investment in China: The Question of Effectiveness

8 The Current Legal Framework of EU Investment in China: The Question of Effectiveness

8.1 The Role of Law in Investment Decision-Making

8.1.1 The Relative Importance of Law as a Determinant of Investment Decision

8.1.2 Investigation of Law before Investment

8.1.3 Importance of Incentives on Investment Decision-Making

8.1.4 Summary

8.2 Effectiveness of the Chinese Legal System

8.2.1 Accessibility of Law

8.2.2 Stability of Law

8.2.3 Government Enforcement of Law

8.2.3.1 Consistency of Government Law Enforcement

8.2.3.2 Need for Bribery to Deal with Government Officials

8.2.4 Court Enforcement of Law

8.2.4.1 Objectivity of Courts Law Enforcement

8.2.4.2 Possibility of Bribing Judges

8.2.4.3 Political Interference in Court Decisions

8.2.4.4 Delays in Court and Arbitration Procedures

8.2.5 Enforcement of Court and Arbitration Decisions

8.2.6 Measuring the FDI Legal System in China against the Ideal Institutional Paradigm

8.3 Conclusions

Part Ⅳ Towards a New International Legal Framework of EU-China Investment Relations

9　Towards a New International Legal Framework of EU-China Investment Relations

9.1 The Need for a New International Legal Framework of EU-China Investment Relations

9.2 The Possibility of a New International Legal Framework of EU-China Investment Relations

9.3 The Forms of a New International Legal Framework of EU-China Investment Relations

9.3.1 Multilateral Approach: A MIA to which the EU and China are Parties

9.3.1.1 The Choice of Forum

9.3.1.2 The Full Participation of Interested Parties

9.3.1.3 The Balance of Interests

9.3.2 Bilateral Approach: A BIT between the EU and China

9.3.2.1 EU-China BIT as a Sectoral Agreement

9.3.2.2 EU-China BIT as a 'Built-in Section' within the Framework Agreement

9.3.3 An EU-China BIT and then an MIA?

9.4 Substantive Issues of the New International Legal Framework of EU-China Investment Relations

9.4.1 A Liberal Admission Regime

9.4.1.1 EU's Attitude towards Investment Admission

9.4.1.2 Chinese Attitude towards Investment Admission

9.4.1.3 Possible Compromise on Investment Admission in the NILF

9.4.2 Post-Establishment National Treatment

9.4.3 'Adequate, Prompt and Effective' Compensation for Expropriation

9.4.4 Automatic Submission of Investment Disputes to International Fora

9.4.4.1 Automatic Submission of Non-AOC Disputes

9.4.4.2 Submission of Disputes to Other International Arbitration Institutions

9.4.5 Social Issues

9.4.5.1 Human Rights

9.4.5.2 Labour and Environmental Standards

9.5 Conclusion

Part Ⅴ The Legal Framework of Investment Relations Between China and the New EU Member States

10 The Legal Framework of Investment Relations between China and the New EU Member States

10.1 Trade and Investment Relations between China and the EU 10 States

10.1.1 Trade and Investment Relations between China and the EU 10 States

10.1.1.1 Cyprus

10.1.1.2 Czech Republic

10.1.1.3 Estonia

10.1.1.4 Hungary

10.1.1.5 Latvia

10.1.1.6 Lithuania

10.1.1.7 Malta

10.1.1.8 Poland

10.1.1.9 Slovakia

10.1.1.10 Slovenia

10.1.2 Overview and Implication on General EU-China Investment and Trade Relations

10.2 The Legal Framework of Investment Relations between China and the EU 10 States

10.2.1 Multilateral Agreements to which China and the EU 10 States are Parties

10.2.1.1 The ICSID Convention

10.2.1.2 The MIGA Convention

10.2.1.3 The WTO Agreements

10.2.2 Bilateral Agreements between China and the EU 10 States

10.2.3 Domestic Laws of China and the EU 10 States

10.2.4 Summary

10.3 The Bilateral Investment Treaties between China and the EU 10 States

10.3.1 Admission

10.3.2 Standards of Treatment

10.3.2.1 General Standards of Treatment

10.3.2.2 Monetary Transfers

10.3.3 Expropriation and Compensation

10.3.3.1 Constitution and Conditions

10.3.3.2 Compensation

10.3.4 Subrogation

10.3.5 Dispute Settlement

10.3.5.1 State-State Disputes

10.3.5.2 State-Investors Disputes

10.3.6 Summary

10.4 Conclusion

Appendix Ⅰ: Questionnaire on Law and European Investment in China

Appendix Ⅱ: Scores Allocated to Questionnaire Responses to the Effectiveness of FDI Legal System in China

Bibliography

Index