Unit 13 International InvestmentUnit 13 International Investment

TextⅠ International InvestmentTextⅠ International Investment

-To learn the 2 major ways of -To learn the 2 major ways of international investment through comparisons international investment through comparisons and diagramsand diagrams

Text Ⅱ Why International Rules on investmentText Ⅱ Why International Rules on investment

-To learn why it is necessary to make -To learn why it is necessary to make international rules on investments international rules on investments

Typical Sentence Patterns: Typical Sentence Patterns:

litigation instruments (III)litigation instruments (III)

TextⅠ International InvestmentTextⅠ International Investment

Useful expressions: reach…level, engage in / be engaged Useful expressions: reach…level, engage in / be engaged in, discriminatory barriers to (prep.), bypass…barrier, in, discriminatory barriers to (prep.), bypass…barrier, be preferable to, share in contribution and ownership, be preferable to, share in contribution and ownership, extraterritorial aspects of laws, in scope, parties extraterritorial aspects of laws, in scope, parties toto a joi a joint venture, critical ingredients, be assured that…, fall ont venture, critical ingredients, be assured that…, fall out of favor with, ruling party, within one’s borders, on ut of favor with, ruling party, within one’s borders, on this score, worker representation on the board of directhis score, worker representation on the board of directors, favorable legal environment, depressed localities, tors, favorable legal environment, depressed localities, increased depreciation, tax incentive, be counteracted increased depreciation, tax incentive, be counteracted by, have…weight, be of some concernby, have…weight, be of some concern

Terms: joint venture, direct investment, country of origin Terms: joint venture, direct investment, country of origin

/ home country cf. country of source / host country, wh/ home country cf. country of source / host country, wholly-owned subsidiary, partnership, part owner, exchaolly-owned subsidiary, partnership, part owner, exchange control, expropriation, nationalization, tax holiday nge control, expropriation, nationalization, tax holiday

Questions based on Part IQuestions based on Part I

1.1. What are the 2 major forms of making What are the 2 major forms of making international investments? international investments?

2.2. Why is making international investments Why is making international investments more preferable than exporting or more preferable than exporting or licensing?licensing?

3.3. What are the factors mentioned in this P What are the factors mentioned in this P art which affect international investments?art which affect international investments?

4.4. What is the country of origin and the What is the country of origin and the country of source respectively?country of source respectively?

Questions based on Part IIQuestions based on Part II

1.1. What are the characteristics of the form What are the characteristics of the form of partnership? of partnership?

2.2. What are the advantages of joint What are the advantages of joint ventures over direct investments? ventures over direct investments?

3.3. What does a part owner refer to? And What does a part owner refer to? And what are the advantages and what are the advantages and disadvantages as to the requirement of disadvantages as to the requirement of the government’s being a part owner of the government’s being a part owner of the joint venture?the joint venture?

4.4. What is the key problem with joint What is the key problem with joint ventures and how to solve it? ventures and how to solve it?

Questions based on Part IIIQuestions based on Part III

1.1. What are the 2 broad considerations What are the 2 broad considerations for the government to enact foreign for the government to enact foreign investment policies?investment policies?

2.2. What are those specific questions What are those specific questions listed which affect foreign direct listed which affect foreign direct investment?investment?

Questions based on Part IVQuestions based on Part IV

1.1. What are the incentives adopted by What are the incentives adopted by governments to attract foreign governments to attract foreign investment?investment?

2.2. What are the laws listed in this Part What are the laws listed in this Part which have an impact on which have an impact on international investment?international investment?

TermsTerms joint venture (JV) joint venture (JV)

合资经营企业，简称合营企业，课文系指国际合营企业合资经营企业，简称合营企业，课文系指国际合营企业参照联合国工业发展组织编写的《发展中国家合营企业参照联合国工业发展组织编写的《发展中国家合营企业

协议指南》，合营企业分为两种基本类型：协议指南》，合营企业分为两种基本类型：（（ 11 ）股份式合营企业（）股份式合营企业（ equity joint ventureequity joint venture ））（（ 22 ）契约式合营企业（）契约式合营企业（ contractual joint venturecontractual joint venture ））

(foreign) direct investment(foreign) direct investment （（ FDIFDI ））（外国）直接投资，课文系指在东道国建立外商独资企（外国）直接投资，课文系指在东道国建立外商独资企

业，简称外资企业业，简称外资企业中国《外资企业法》第中国《外资企业法》第 22 条规定：外资企业是指按照中条规定：外资企业是指按照中

国有关法律在中国境内设立的国有关法律在中国境内设立的全部资本全部资本由外国投资者投资的企由外国投资者投资的企业，不包括外国的企业和其他经济组织在中国境内的分支机构。业，不包括外国的企业和其他经济组织在中国境内的分支机构。

20072007中国外资企业名录中国外资企业名录 http://industry.emagecompany.com/foreign/http://industry.emagecompany.com/foreign/

country of origin / home country country of origin / home country 投资者母国投资者母国country of source / host country country of source / host country 东道国东道国

partnership partnership 合伙合伙

part owner part owner 共有人共有人 (( 合资企业中参与合资几方中的一方合资企业中参与合资几方中的一方 )) tax holiday tax holiday 非课税期、免税期 非课税期、免税期

-a stated period of years during which, in some countries, a -a stated period of years during which, in some countries, a producer who sets up a new industrial unit, or expands his producer who sets up a new industrial unit, or expands his existing unit to increase his exports, enjoys the advantage oexisting unit to increase his exports, enjoys the advantage of paying no tax on part or the whole of his profitsf paying no tax on part or the whole of his profitsThis freedom from tax is given as a means to attracting new This freedom from tax is given as a means to attracting new industries, or of encouraging industries to export more gooindustries, or of encouraging industries to export more goodsds

depreciationdepreciation （货币）贬值 （货币）贬值 (opposite: apprecia(opposite: appreciation)tion)

-In foreign-exchange business, there is d-In foreign-exchange business, there is depreciation of a country’s currency (the excepreciation of a country’s currency (the exchange rate falls) if the demand for it is small ihange rate falls) if the demand for it is small in relation to the supply offered on the marken relation to the supply offered on the market. Imports into that country thus become deat. Imports into that country thus become dearer and its exports cheaper when measured brer and its exports cheaper when measured by other currencies.y other currencies.

exchange control exchange control 外汇管制外汇管制

2 types of currency risk2 types of currency risk(1)(1) Fluctuation risk: the possibility that the currency Fluctuation risk: the possibility that the currency

of the host country in which the investor has put of the host country in which the investor has put its money will devalue against the currency of thits money will devalue against the currency of the home countrye home country

(2)(2) Inconvertibility risk: the risk that the government Inconvertibility risk: the risk that the government of a host country with soft currency will hinder thof a host country with soft currency will hinder the foreign entrepreneur from trading the foreign ce foreign entrepreneur from trading the foreign currency back into the currency of the home counurrency back into the currency of the home country or another hard currencytry or another hard currency

soft currency soft currency 软通货软通货-money of a particular country that may fall i-money of a particular country that may fall in value and is difficult to exchange for the mon value and is difficult to exchange for the money of a country that is economically strongeney of a country that is economically strongerr

hard currency hard currency 硬通货硬通货-money that is from a country that has a stro-money that is from a country that has a strong economy and is therefore unlikely to lose ing economy and is therefore unlikely to lose its valuets value

Extraterritoriality Extraterritoriality 治外 治外 / / 域外法权域外法权

(US) Foreign Trade Antitrust Improvements Act(US) Foreign Trade Antitrust Improvements Act-US antitrust law does not apply to conduct un-US antitrust law does not apply to conduct un

less such conduct has a “direct, substantial, and reless such conduct has a “direct, substantial, and reasonably foreseeable effect on US commerce or on tasonably foreseeable effect on US commerce or on the business of a person engaged in exporting goods he business of a person engaged in exporting goods from the US to foreign nations”.from the US to foreign nations”.

任何发生在美国境外的但与美国反托拉斯法的精任何发生在美国境外的但与美国反托拉斯法的精神相抵触的行为，不管行为者的国籍，只要该行为对美神相抵触的行为，不管行为者的国籍，只要该行为对美国市场竞争发生影响，美国法院对之就有管辖权。此观国市场竞争发生影响，美国法院对之就有管辖权。此观点被许多国家的反垄断法所吸收。 点被许多国家的反垄断法所吸收。

Expropriation Expropriation 征用、征购、没收征用、征购、没收

-any action by a government that takes away a person’s rig-any action by a government that takes away a person’s right to propertyht to property

Nationalization Nationalization 国有化 （国有化 （ opposite: denationalization, privatizopposite: denationalization, privatizationation ））-the act of bringing land, industries, trade, etc. under the con-the act of bringing land, industries, trade, etc. under the control and ownership of the nationtrol and ownership of the nation

ComparisonComparison: The classic : The classic expropriationexpropriation is taking of an isolated i is taking of an isolated item of property. The foreign investor is singled out as the tartem of property. The foreign investor is singled out as the target of governmental action in a fashion that might be viewed get of governmental action in a fashion that might be viewed as discriminatory and not part of a national public plan. By cas discriminatory and not part of a national public plan. By contrast, a ontrast, a nationalizationnationalization is the taking of an entire industry o is the taking of an entire industry or a natural resource as part of a plan to restructure the natior a natural resource as part of a plan to restructure the nation’s economic system. Full compensation is not required unn’s economic system. Full compensation is not required under sovereign rights theories.der sovereign rights theories.

Under western Under western traditional theorytraditional theory, the foreign , the foreign investor would have been exempt from such takings. investor would have been exempt from such takings. Western Western modern-traditional theorymodern-traditional theory recognizes the recognizes the sovereign’s right to nationalize foreign-owned sovereign’s right to nationalize foreign-owned property, but places property, but places conditionsconditions on the proper exercise on the proper exercise of that right. The exercise of the right must be:of that right. The exercise of the right must be:

(1)(1) for public purpose;for public purpose;(2)(2) nondiscriminatory, not directed specifically against a nondiscriminatory, not directed specifically against a

foreign person; andforeign person; and(3)(3) accompanied by prompt, adequate, and effective accompanied by prompt, adequate, and effective

compensation.compensation.

However, However, during the twentieth centuryduring the twentieth century, much of , much of the world rejected modern-traditional theory and the world rejected modern-traditional theory and adopted theories that in one way or another asserted adopted theories that in one way or another asserted that the state had a right to take foreign property for that the state had a right to take foreign property for what purposes it chose and upon payment of less what purposes it chose and upon payment of less than full compensation. than full compensation. In recent yearsIn recent years, the number , the number of adherents to sovereign rights theories has been in of adherents to sovereign rights theories has been in a steep decline.a steep decline.

Text Ⅱ Why International Rules Text Ⅱ Why International Rules on Investmenton Investment

Useful expressions: foreign affiliate, on…scale, per Useful expressions: foreign affiliate, on…scale, per se, tax evasion, with a view to (prep.), be factorese, tax evasion, with a view to (prep.), be factored in, sustainable development, be adapted to, pd in, sustainable development, be adapted to, pertaining to, subsidy raceertaining to, subsidy race

Terms: FDI, balance of payments, GNP, MNE, princTerms: FDI, balance of payments, GNP, MNE, principle of non-discrimination, discount rateiple of non-discrimination, discount rate

proper names: UNCTAD, EC Treaty, MERCOSUR, Nproper names: UNCTAD, EC Treaty, MERCOSUR, NAFTA, TRIMs, ECTAFTA, TRIMs, ECT

Questions based on Text IIQuestions based on Text II

1.1. What is the status quo of international What is the status quo of international rule-making on investment?rule-making on investment?

2.2. How is the legal climate of the host How is the legal climate of the host country related to investment?country related to investment?

3.3. What are the benefits of formulating What are the benefits of formulating international rules on investment?international rules on investment?

4.4. What conditions should be met in What conditions should be met in formulating such rules?formulating such rules?

5.5. Why should such rules be multilateral?Why should such rules be multilateral?

国际投资领域重要多边公约 国际投资领域重要多边公约

1.1. 世界银行于世界银行于 19651965 年在华盛顿签定了《东道国与其他国家国民之年在华盛顿签定了《东道国与其他国家国民之间投资争议解决公约》，又称《华盛顿公约》，并根据《公约》间投资争议解决公约》，又称《华盛顿公约》，并根据《公约》于于 19661966 年在世界银行内设立了“解决投资争议国际中心” （年在世界银行内设立了“解决投资争议国际中心” （ ICICSIDSID ：： International Centre for Settlement of Investment DisInternational Centre for Settlement of Investment Disputesputes ））

2.2. 世界银行于世界银行于 19851985 年在汉城通过了《多边投资担保机构公约》，年在汉城通过了《多边投资担保机构公约》，又称《汉城公约》，即又称《汉城公约》，即 MIGAMIGA （（ Multilateral Investment GuaraMultilateral Investment Guarantee Agencyntee Agency ）公约。）公约。

3. WTO3. WTO 《与贸易有关的投资措施协定》（《与贸易有关的投资措施协定》（ Agreement on TradeAgreement on Trade－－ Related Investment Measures, TRIMSRelated Investment Measures, TRIMS ））

4. WTO4. WTO 《服务贸易总协定》 （《服务贸易总协定》 （ the General Agreement on Trade the General Agreement on Trade in Services, GATSin Services, GATS ）） (Part III) (Part III)

TermsTerms

balance of payments balance of payments 国际收支差额 国际收支差额 GNP (gross national product) GNP (gross national product) 国民生产总国民生产总

值值MNE (multinational enterprise) MNE (multinational enterprise) 跨国公司跨国公司principle of non-discrimination principle of non-discrimination 无歧视原无歧视原则则

discount rate discount rate 贴现率 贴现率

Proper namesProper names

UNCTAD (United Nations Conference on Trade anUNCTAD (United Nations Conference on Trade and Development) d Development) 联合国贸易和发展会议 联合国贸易和发展会议

EC Treaty EC Treaty 欧共体条约欧共体条约MERCOSUR (Southern Common Market) MERCOSUR (Southern Common Market)

南锥体共同市场 南锥体共同市场 NAFTA (North American Free Trade Agreement)NAFTA (North American Free Trade Agreement)

北美自由贸易协定 北美自由贸易协定 TRIMs (Agreement on Trade-Related Investment TRIMs (Agreement on Trade-Related Investment

Measures) Measures) 与贸易有关的投资措施协议与贸易有关的投资措施协议ECT (Energy Charter Treaty)ECT (Energy Charter Treaty) （欧盟）能源宪章条约（欧盟）能源宪章条约