Table of Contents

  • The OECD reviews the five landmark laws and sets of regulations promulgated since the publication of the 2006 OECD Investment Policy Review of China. It finds that these changes improve the tax and competition elements of the regulatory environment within which businesses, including foreign-owned enterprises (FIEs), operate in China, but tighten restrictions on inward direct investment, including cross-border mergers and acquisitions. The review also takes stock of developments in China’s inward and outward FDI statistics methodology.

  • This chapter assesses the extent to which China’s legal and regulatory framework for investment has been improved since the the publication of the 2006 OECD Investment Policy Review of China, including new cross-border mergers and acquisitions regulations, the Enterprise Income Tax Law, the Property Rights Law, the Anti-Monopoly Law and the latest revision of the Catalogue for Guiding Foreign Investment Industries.

  • International comparability is an indispensible feature of FDI statistics for any country, particularly if it is a major player in the global economy. The OECD’s Benchmark Definition of Foreign Direct Investment sets the world standard for measuring FDI. Within that framework, the OECD has established close links with China to provide assistance in best practices through its network of experts. This chapter evaluates recent improvements in China’s FDI statistics and makes a number of recommendations based on the Benchmark Definition.

  • Following its success in opening the economy and attracting inward FDI, China has been rapidly becoming an important source of outward foreign direct investment (OFDI) in recent years. Starting from virtually no OFDI in 1979, China had accumulated USD 90.6 billion of OFDI stock overseas by the end of 2006. China’s OFDI flow and stock now stand the 4th largest and the 6th largest, respectively, among developing countries. This chapter provides a unique account of the motivations for and development of China’s OFDI in the light of government policy encouraging companies to “go global”, focusing in particular on Chinese investment in Africa. 

  • China’s promotion of a code of responsible business conduct can help build the harmonious society that the country’s leaders have espoused as a top priority and can also encourage more and better FDI inflows to China by improving the business environment for foreign investors. This chapter provides the first detailed and comprehensive analysis of the Chinese government’s efforts to encourage responsible business conduct by enterprises in China and by Chinese enterprises operating abroad, highlighting in particular efforts to strengthen environmental protection and respect for core labour standards by enterprises. 

  • Economic growth and industrialisation in China, characterised by heavy reliance on coal as the main energy source and rapid urbanisation, have been accompanied by negative impacts on the environment which have been increasingly visible in recent years. This has raised environmental awareness and concerns among political leaders, government officials and the public in China. This chapter outlines the challenges faced by the Chinese government in encouraging environmentally responsible conduct on the part of Chinese enterprises and possible policy options to address these challenges.