CPPCC members playing their roles

Law on overseas investment required

With the strengthening of economic globalization, more domestic private enterprises are joining the tide of overseas investment. However, the overseas investment activities of Chinese private enterprises face some obstacles that make it difficult for them to safeguard their rights and interests overseas.

The country's legislation to protect the rights and interests of domestic private enterprises that have investments overseas lags behind those of other countries, as there is no specific law or regulation related to overseas investments.

Due to the unclear demarcation of power among different departments, current administrative regulations and departmental rules cannot provide a guarantee for the overseas investments of domestic private enterprises. The absence of a sound overseas investment insurance system, the lack of policy consistency in some foreign countries resulting from unstable political situations, and the weak self-protection awareness of some small enterprises, have also brought various problems and challenges, highlighting the need for legal protection of their overseas investment activities.

China needs to accelerate the establishment of an overseas investment legal protection system. It should formulate a basic overseas investment law that clarifies the basic concepts of overseas investment and the legal relations and power division among government departments, and enact, revise or abolish administrative regulations and departmental rules. It should try to dovetail domestic laws and regulations with multilateral and bilateral agreements, and make timely amendments to domestic legal clauses that do not match these agreements to ensure their synergy.

The government should strengthen guidance and provide consulting services to solve the problem of blind investment by domestic private enterprises due to information asymmetry. And an overseas investment insurance system should be formulated as soon as possible, making special provisions on such issues as the scope of insurance, underwriting conditions, amount of insurance and subrogation for overseas direct investment.

Practical measures should also be taken to improve overseas investment enterprises' intellectual property management and protection, and to establish an early warning mechanism. At the same time, close attention should be paid to the legal risks arising from the signing and execution of contracts, and such important provisions as breach of contract, compensation claims, force majeure and arbitration put in place.