The impact of the new Chinese Foreign Investment Law 2019 on the administrative legal system governing foreign investments and implications for the investment relations with Lusophone Markets

• Author: Muruga P. Ramaswamy
• Pages: 330-343

The impact of the new Chinese Foreign Investment Law 2019

on the administrative legal system governing foreign investments

and implications for the investment relations with Lusophone Markets1

Associate professor Muruga P. RAMASWAMY2

Abstract

In March 2019, China revamped its domestic legal regime governing foreign

investments with a new Foreign Investmen t Law that will enter into force in 2020 (‘FIL-

2019’). The paper exa mines how the new law impacts the administrative control of foreign

investments in China. Given the past approach of China, using administrative legal measures

in diverse legal instruments to regulate foreign investments, how the FIL 2019

abolishing/consolidating those instruments increases or decreases the scope of

administrative control of foreign investment is an intriguing question facing foreign investors

and administrative law scholars alike. In a similar vein, the potential implications of the new

FIL 2019 upon specific foreign investment relations becomes equally significant. The FIL

2019 could not only trigger new reciprocity concerns viz-a-viz certain host states of Chinese

outward investments, but also may demand the revision of some existing Chinese BITs with

foreign states. The paper makes a brief reference regarding the general implications of the

new law upon the investment relations with specific Lusophone host markets (for which,

Macau SAR is the official facilitator of Economic Relations). Based on the findings, the paper

concludes with a discussion on some future course.

Keywords: foreign investments, administrative control, PRC administrative law,

Foreign Investment Law 2019.

JEL Classification: K22, K23

1. Introduction

Administrative legal regime of the People’s Republic of China (PRC) is an

intriguing field of research for any comparative legal study, due to its unique

characteristics and distinct flavour. The nature of the PRC administrative legal

system has even impelled questions regarding its very existence as an independent

discipline of law. The absence or limited recognition of certain typical elements,

which are generally found in administrative law, like for example, the right to seek

judicial review of administrative action has prompted such challenges. Moreover,

the general concerns regarding limitations of separation of powers or rule of law in

the PRC have also added further impetus for such arguments. However, many of the

related debates may not stand enough ground today due to the substantive growth

and transformation of field of administrative law in the PRC during the last three

decades.

1 The author would like to acknowledge and thank the support of the University MYRG project grant

related to the paper.

2 Muruga P. Ramaswamy - Faculty of Law, University of Macau, Macau, China, rmp@umac.mo.