The Legal Subsystem
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The Chinese legal subsystem regarding overseas investment by Chinese entities includes relevant domestic laws and international treaties, primarily bilateral investment treaties (BITs), international tax treaties -mainly bilateral tax treaties (BTTs)- and free trade agreements (FTAs). Chinese laws governing overseas investment are far from perfect, as overseas investment administration, promotion and protection generally remain at the level of departmental regulations, which is out of sync with the fast-growing overseas investment activities by Chinese organizations. China has signed a multitude of international treaties, but these treaties are generally outdated since most of them were institutionally designed with the idea that China would be the receiving, not contributing, country for such investments. In other words, these treaties are unable to meet China’s current overseas investment needs, and hence, urgently require amendments and improvements. Accordingly, accelerating domestic legislation for investment while improving relevant international treaties is a top priority in building China’s overseas investment promotion system.