Unit 13 International Investment
TextⅠ International Investment
-To learn the 2 major ways of international
investment through comparisons and diagrams
Text Ⅱ Why International Rules on investment
-To learn why it is necessary to make
international rules on investments
Typical Sentence Patterns:
litigation instruments (III)
TextⅠ International Investment
Useful expressions: reach…level, engage in / be engaged in,
discriminatory barriers to (prep.), bypass…barrier, be
preferable to, share in contribution and ownership,
extraterritorial aspects of laws, in scope, parties to a joint
venture, critical ingredients, be assured that…, fall out of
favor with, ruling party, within one’s borders, on this
score, worker representation on the board of directors,
favorable legal environment, depressed localities,
increased depreciation, tax incentive, be counteracted by,
have…weight, be of some concern
Terms: joint venture, direct investment, country of origin /
home country cf. country of source / host country, whollyowned subsidiary, partnership, part owner, exchange
control, expropriation, nationalization, tax holiday
Questions based on Part I
1. What are the 2 major forms of making
international investments?
2. Why is making international investments more
preferable than exporting or licensing?
3. What are the factors mentioned in this P art
which affect international investments?
4. What is the country of origin and the country of
source respectively?
Questions based on Part II
1. What are the characteristics of the form of
2.
3.
4.
partnership?
What are the advantages of joint ventures over
direct investments?
What does a part owner refer to? And what are
the advantages and disadvantages as to the
requirement of the government’s being a part
owner of the joint venture?
What is the key problem with joint ventures
and how to solve it?
Questions based on Part III
1. What are the 2 broad considerations for
the government to enact foreign
investment policies?
2. What are those specific questions listed
which affect foreign direct investment?
Questions based on Part IV
1. What are the incentives adopted by
governments to attract foreign
investment?
2. What are the laws listed in this Part which
have an impact on international
investment?
Terms
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
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：
（1）股份式合营企业（equity joint venture）
（2）契约式合营企业（contractual joint venture）
(foreign) direct investment（FDI）
（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
中国《外资企业法》第2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全部资本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。
2007中国外资企业名录 http://industry.emagecompany.com/foreign/
country of origin / home country 投资者母国
country of source / host country 东道国
partnership 合伙
part owner 共有人(合资企业中参与合资几方中的一方)
tax holiday 非课税期、免税期
-a stated period of years during which, in some countries, a
producer who sets up a new industrial unit, or expands his
existing unit to increase his exports, enjoys the advantage of
paying no tax on part or the whole of his profits
This freedom from tax is given as a means to attracting new
industries, or of encouraging industries to export more goods
depreciation（货币）贬值 (opposite: appreciation)
-In foreign-exchange business, there is
depreciation of a country’s currency (the
exchange rate falls) if the demand for it is small
in relation to the supply offered on the market.
Imports into that country thus become dearer
and its exports cheaper when measured by
other currencies.
exchange control 外汇管制
2 types of currency risk
(1) Fluctuation risk: the possibility that the currency of
the host country in which the investor has put its
money will devalue against the currency of the
home country
(2) Inconvertibility risk: the risk that the government
of a host country with soft currency will hinder the
foreign entrepreneur from trading the foreign
currency back into the currency of the home
country or another hard currency
soft currency 软通货
-money of a particular country that may fall in
value and is difficult to exchange for the money
of a country that is economically stronger
hard currency 硬通货
-money that is from a country that has a strong
economy and is therefore unlikely to lose its
value
Extraterritoriality 治外 / 域外法权
(US) Foreign Trade Antitrust Improvements Act
-US antitrust law does not apply to conduct unless
such conduct has a “direct, substantial, and
reasonably foreseeable effect on US commerce or on
the business of a person engaged in exporting goods
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。此观点
被许多国家的反垄断法所吸收。
Expropriation 征用、征购、没收
-any action by a government that takes away a person’s right
to property
Nationalization 国有化 （opposite: denationalization, privatization）
-the act of bringing land, industries, trade, etc. under the
control and ownership of the nation
Comparison: The classic expropriation is taking of an isolated item
of property. The foreign investor is singled out as the target of
governmental action in a fashion that might be viewed as
discriminatory and not part of a national public plan. By
contrast, a nationalization is the taking of an entire industry or
a natural resource as part of a plan to restructure the nation’s
economic system. Full compensation is not required under
sovereign rights theories.
(1)
(2)
(3)
Under western traditional theory, the foreign investor
would have been exempt from such takings. Western
modern-traditional theory recognizes the sovereign’s right
to nationalize foreign-owned property, but places
conditions on the proper exercise of that right. The
exercise of the right must be:
for public purpose;
nondiscriminatory, not directed specifically against a
foreign person; and
accompanied by prompt, adequate, and effective
compensation.
However, during the twentieth century, much of the
world rejected modern-traditional theory and adopted
theories that in one way or another asserted that the state
had a right to take foreign property for what purposes it
chose and upon payment of less than full compensation. In
recent years, the number of adherents to sovereign rights
theories has been in a steep decline.
Text Ⅱ Why International Rules
on Investment
Useful expressions: foreign affiliate, on…scale, per
se, tax evasion, with a view to (prep.), be factored
in, sustainable development, be adapted to,
pertaining to, subsidy race
Terms: FDI, balance of payments, GNP, MNE,
principle of non-discrimination, discount rate
proper names: UNCTAD, EC Treaty, MERCOSUR,
NAFTA, TRIMs, ECT
Questions based on Text II
1. What is the status quo of international
2.
3.
4.
5.
rule-making on investment?
How is the legal climate of the host
country related to investment?
What are the benefits of formulating
international rules on investment?
What conditions should be met in
formulating such rules?
Why should such rules be multilateral?
国际投资领域重要多边公约
1.世界银行于1965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》于
1966年在世界银行内设立了“解决投资争议国际中心” （ICSID：
International Centre for Settlement of Investment Disputes）
2.世界银行于1985年在汉城通过了《多边投资担保机构公约》，又
称《汉城公约》，即MIGA（Multilateral Investment Guarantee
Agency）公约。
3. WTO《与贸易有关的投资措施协定》（Agreement on Trade－
Related Investment Measures, TRIMS）
4. WTO《服务贸易总协定》 （the General Agreement on Trade in
Services, GATS）(Part III)
Terms
balance of payments 国际收支差额
GNP (gross national product) 国民生产总值
MNE (multinational enterprise) 跨国公司
principle of non-discrimination 无歧视原则
discount rate 贴现率
Proper names
UNCTAD (United Nations Conference on Trade and
Development) 联合国贸易和发展会议
EC Treaty 欧共体条约
MERCOSUR (Southern Common Market)
南锥体共同市场
NAFTA (North American Free Trade Agreement)
北美自由贸易协定
TRIMs (Agreement on Trade-Related Investment
Measures)
与贸易有关的投资措施协议
ECT (Energy Charter Treaty)（欧盟）能源宪章条约