Sutbaeva Raikhan

Caspian State University of Technology and Engineering named after Sh.Esenov

Overseas investment by Chinese companies

The last few years, China is not only the largest recipient, but one of the largest donors of foreign direct investment. In this article we will talk about the state regulation of investment activities of Chinese companies abroad.

Regulation of investment activities of Chinese companies abroad, mainly within the competence of the Ministry of Commerce of China. This Office, firstly, is working on preliminary approval of foreign investment projects of Chinese companies (together with the State Committee for Development and Reform Commission of China), and secondly, supervises and directs the investment activities of Chinese business, informing the business environment and encouraging investments in certain sectors of foreign countries.

Preliminary approval of foreign investment projects. Preliminary approval of overseas investment by Chinese companies is carried out by the State Committee for Development and Reform Commission and the Ministry of Commerce of China. After receiving permission for the implementation of the investment project abroad, the Chinese investor must also pass registration in the control bodies (the State Administration of Foreign Exchange Control of China) for the outflow of funds in foreign currency. In the case of investments abroad made public enterprise, the approval of the investment project is also carried out by the Committee for State Property Management.

The competence of the State Committee for Development and Reform Commission include approval of foreign investment projects with an investment volume of more than 300 mln. Dollars. In the mining sector, or more than 100 million. Dollars. In other activities. Local authorities spend Committee approval of all other investment projects.

In accordance with the applicable rules (Rules interim management statement of foreign investment projects, State Committee of Development and Reform № 21-2004) decision on approval or refusal of approval shall be made within 20 working days from the date of acceptance of the application for review. In the case of a positive decision of the State Committee of Development and Reform investor moves to the next stage - a permit by the Ministry of Commerce of China.

Preliminary approval of overseas investment by Chinese companies is carried out by the Ministry of Commerce in accordance with the rules governing foreign investment (Order of the Ministry of Commerce of China № 5-2009). The effect of this document applies to the establishment of organizations of Chinese corporates abroad, participation in the share capital of these companies, or gain control over these enterprises. Chinese enterprises can carry out foreign investment, creating new business or conducting M & A transactions with existing ones.

In accordance with the Rules before the Foreign Investment Chinese organization must receive prior approval by the authorities of the Ministry of Commerce of China. The jurisdiction of the Ministry of Commerce attributed the preliminary examination of investment projects and the issuance of permits, if the recipient of the investment is a country that has no diplomatic relations with the PRC (ie countries that recognize the Republic of China), or the country from the special list of Ministry of Commerce (now in the list, Iraq and Taiwan).

Ministry of Commerce shall review applications and issue permits for the participation of Chinese business in foreign investment projects if the total size of China's investment in the project exceeds 100 million USD. In addition, the jurisdiction of the Ministry of Commerce approval of foreign investment related projects affecting several states and (or) territories and the establishment of overseas special purpose companies.

The jurisdiction of the territorial bodies of the Ministry of Commerce of the provincial level and equivalent (provinces, autonomous regions, municipalities, and cities under central planning and Xinjiang Production and Construction Corporation) includes preliminary examination and approval of investment projects, in which the total amount of investment of the Chinese side ranging from 10 million to 100 million US dollars, the investment of Chinese companies in the mining and energy, as well as investment projects that need to find partners in China.

The rest of the investment projects approved by a simplified procedure: the organization submits an application for approval of an investment project in an electronic form, which is to be approved within three working days if the proper completion and a formal declaration of conformity.

The procedure for approval of investment projects in the bodies of the Ministry of Commerce of China

For the approval of the investment project in the Ministry of Commerce or its territorial body of the Chinese organization is obliged to submit the following documents:

1. The application, which must contain: the name, the size of the authorized capital, investment, nature of business, the period of conducting the activities of a foreign enterprise, is the object of investment; an explanation of the sources of the capital of Chinese enterprises, detailed information on the nature of the investment, the structure of the distribution of equity impact assessment of the investment project on the environment (environmental impact assessment) as well as the statement of the investor that the investment project is not a prohibited by the rules.

2. A copy of the certificate of the right Chinese business organization (the document is a state registration certificate issued for registration of Chinese enterprises in trade and industrial bodies of the administration).

3. The charter, foundation agreement and (or) other constituent documents of the foreign company, which is the object of investment.

4. Documents confirming the authorization by the relevant state authorities or registration in appropriate state bodies (depending on the investment project).

5. In the implementation of investment through merger or acquisition is additionally supplied Reporting Form for the merger or acquisition abroad.

6. Other documents and materials at the request of the Ministry of Commerce or its territorial body.

All Chinese organizations (other than those relating to the central enterprises) submit documents to the territorial authority of the Ministry of Commerce at the provincial level, which redirects to the Ministry of Commerce of the PRC application documents for the project, the approval of which is administered by the Ministry.

For all investment projects, the approval of which is under the Ministry of Commerce of China, as well as the projects of investment in mining and energy, required to seek the views of trade and economic department of the diplomatic representation (a consular institution) of the PRC in the state recipient of Chinese overseas investment. In other cases, bodies of the Ministry of Commerce of China has the right to send such a request, although not required to do so.

Economic and Commercial Section at the diplomatic mission or consular office of China is obliged to respond to the request by sending, within 10 working days of the recommendation, which should be based on the information on the security level of investment activity in the recipient country and the impact of investment on the bilateral political, trade and economic ties.

When investing in mining Ministry of Commerce or its regional bodies are also required to seek the opinion of the relevant Chinese Chamber of Commerce or trade association, which is taken into account when making a decision.

After receiving all the necessary recommendations (if necessary), Ministry of Commerce of the PRC or its territorial body inspects application documents and make a decision on approval or denial of approval of the investment project. In case of a positive decision the Chinese party may move to the last stage - a permit in the bodies of currency control to transfer funds abroad.

Refusal of approval of the investment project can be appealed in administrative review or court.

Requirements for the activities of Chinese enterprises abroad

Rules control foreign investments also include certain requirements for the activities of Chinese investors overseas.

Firstly, Chinese investors are not entitled to use the name of their foreign companies the word "China", "China", "Chinese" or "state".

Secondly, on the Chinese investors it is obliged to objectively assess their own capabilities (quote) and investment climate of the state of the recipient, to observe the conduct of the activities of the law of China and the government of the recipient.

Third, Chinese enterprises are obliged to establish a risk management system that would ensure the safety of life and property of its employees, and follow the instructions of the embassy or consulate of China at the location in an emergency. Persons representing the Chinese side in the foreign enterprises are required to embark on a consular register at the place of stay.

It is worth mentioning that from May 1, 2011 bribery of foreign officials and officials of public international organizations in China is punishable by criminal penalties. In accordance with Article 164 of the Criminal Law bribe these people on a large scale shall be punished by short-term arrest or imprisonment for up to 3 years; on a large scale - shall be punished with imprisonment from 3 to 10 years and a criminal fine.

Statistics of Chinese enterprises investing activities

Ministry of Commerce publishes an annual statistical report on foreign direct investment of Chinese enterprises. The latest report was published in late August 2012, and contains information about the investment of Chinese enterprises in 2011

In 2011, the total volume of Chinese investment abroad amounted to 74.6 billion. Dollars. USA (sixth in the world). Statistics by country and region: Chinese investment in the EU amounted to 7561 mln. Dollars. United States (up 26.8%) in the ASEAN countries - 5905 mln. Dollars. United States (up 34.1%), Australia - 3 165 mln. USD. US (up 86%), in the US - 1 811 million. dollars. United States (up 38.5%), in Russia - 716 million. dollars. United States (up 26.1% ).

By the end of 2011 during the time of statistical observation over 13.5 thousand. Chinese investors have established abroad about 18 thousand. Foreign enterprises in 177 countries and regions worldwide. The total volume of accumulated foreign investment of Chinese enterprises at the end of 2011 amounted to 424.78 billion. Dollars. USA. As the volume of accumulated foreign FDI China climbed to 13th in the world (in four places up compared to the previous year).

A large part of Chinese investments (about 60%) goes to offshore jurisdictions or jurisdictions with a special regime of taxation. Among the main Hong Kong, Luxembourg, the British Virgin Islands and the Cayman Islands.

Investment Climate Assessment of foreign countries

Since 2009, the Ministry of Commerce publishes directories of foreign states that Chinese investors can use as a guide to assess the client's investment recipient countries. Directories contain information about the political system, economic and social situation in the recipient country, the level of infrastructure development, the size of the domestic market, the cost of conducting industrial activity, legal regulation of investment activity in the recipient country.

Reference is now published on the majority of countries, including Russia.

Directory names prohibited for foreign investment activities in the Russian Federation (the gambling business, life insurance) and restrictions on foreign investment activities (in line with N 57-FZ "On the Procedure for Foreign Investment in Business Entities of Strategic Importance for National Defense and State Security ").

Encourage the activities of Russia in reference calls oil, natural gas, coal, wood, building materials, construction, transport and communications, food processing, automotive and textiles.

In the section on legal regulation provides information on foreign trade regulation, customs regulation, taxation and tax procedure, labor law and conditions of employment of foreign nationals, the legislation on environmental protection.

Priority sectors for Chinese investment

Activities abroad priority for Chinese investors, identified the three documents of the Ministry of Commerce of China and the Chinese Foreign Ministry. Chinese investors are investing in the priority sectors may be eligible for state assistance in matters of transfer of capital, foreign exchange control, taxation, customs clearance, border control.

For each of the foreign countries Ministry of Commerce and Ministry of Foreign Affairs of the PRC establishes a single list of priority sectors. It should list the sectors that are named a priority for Chinese investors in Russia and surrounding countries.

The priority sectors for investment in Russia are logging, cultivation of vegetables and fruits; oil and natural gas, coal, iron ore, copper ore, bauxite, nickel ore, lead and zinc ores and other minerals; production printing equipment, production of computers, TVs, electronic and telecommunication equipment, wood processing and furniture manufacturing, textiles and clothing, paper, tobacco, plastics, construction on ships and other vehicles; trade and distribution, telecommunications, transport services, public catering, construction, tourism, education, healthcare, financial services and information technology.

In Belarus, the priority sectors are growing fruits and vegetables, animal husbandry; potassium; food processing, wood processing, manufacture of leather, manufacture of telecommunications equipment, computers and other electronic equipment; trade and services in the field of information technology.

In Ukraine, the priority sectors are growing fruits and vegetables; mining of iron ore and coal; pulp and paper industry, the steel industry, the construction of water vessels and other vehicles, chemical industry; trade, distribution and construction.

Priority sectors for Chinese investors in Kazakhstan are oil and natural gas, bauxite, iron ore, copper ore; production equipment, production of cars, motorcycles, bicycles and other vehicles, plastics, tobacco, food industry; trade and distribution, transportation, telecommunication services, services in the field of construction.

The priority sectors for investment in Kyrgyzstan are mining gold ore and coal; paper production, processing of agricultural products, beverages, plastics; telecommunication services and information technology.

Priority sectors for Chinese investment in Uzbekistan are oil and natural gas; equipment manufacturing, textile, chemical industry; creating objects of capital infrastructure.

Literature

1. Инвестиционная политика и инвестиционный климат в Казахстане// Транзитная экономика. - 2002.-.N" 2.-с. 117-130.

2. Francioni F. bnprese multinztionali, protezione diplomatica e responsabilita intemazionale. - Milano: Giuffre, 1979. - /3/.

3. L'Entreprise multinational face au droit / Sous la red. De Goldman В., Francescakis Ph. - P.: Libr. Technigues, 1977.