OECD Investment Policy Reviews: China 2008

Encouraging Responsible Business Conduct

image of OECD Investment Policy Reviews: China 2008

This Investment Policy Review of China 2008 reviews Chinese government efforts to encourage responsible business conduct against the backdrop of recent regulatory changes and China's increasing outward investment. It assesses the extent to which China's legal and regulatory framework for investment has been improved since the 2006 Review, 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. It also evaluates recent improvements in China's FDI statistics.

The 2008 Review provides a unique account of the motivations for and development of China's outward direct investment in recent years in light of government policy encouraging companies to "go global", focusing in particular on Chinese investment in Africa. It provides the first detailed and comprehensive analysis of the 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. The Review concludes with an evaluation of enterprises' environmental conduct in China.



Executive Summary

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.


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