Chinese Expansion in the EU: Strategies and Policies of the Two Blocks and the Role of the U.S.

Chinese Expansion in the EU: Strategies and Policies of the Two Blocks and the Role of the U.S.

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Overview

Globalization has impacted many facets of life, but none so keenly as international trade. Written by a team of international lawyers with broad experience in the area, this book provides a thorough analysis of the restrictions—especially the internal restrictions imposed by the Chinese government—on the outflow of investments from China to the European sector. It shows how the dynamic has changed dramatically in recent years as China positions itself in international markets and pours massive amounts of money into those investments.

Chinese Expansion in the EU is a comprehensive guide to Chinese investment, covering the European Union merger control regime and how its institutions operate, development and deployment of innovative emerging industries and technologies, strategies to attract Chinese investors in Europe, investment diversification, the impact of new reforms on China-EU policies, and the effective protection of intellectual property rights. It also includes a detailed analysis on investments in the US.

A final chapter offers intriguing insight into the organization and operations of the CIC—the China Investment Corporation—particularly in regards to the EU.

This is an important guide and reference for all counsel representing corporations interested in investing in the EU—whether they are exploring the allocation of their resources in China or aiming to keep up with the rapidly changing global marketplace.

Product Details

ISBN-13: 9781634254991
Publisher: American Bar Association
Publication date: 12/07/2017
Pages: 360
Product dimensions: 6.89(w) x 10.09(h) x 0.75(d)

About the Author

Cristiano Rizzi, Zhonglun W&D (Milan and Beijing), holds an LLM in Chinese law from Peking University, in Beijing, China; an LLM in Spanish law from the University of Valladolid, in Spain; and an LLM in international business law from the University of Exeter in the UK.

Paolo Rizzi is an independent consultant practicing in Italy and Spain, and works on the structuring of foreign direct investment in China for Italian clients. He holds an LLM in international law obtained at Brook’s University, Oxford, United Kingdom, and an LLM in Spanish law from the University of Valladolid in Spain.

Lex Smith is president of Merger Mines Corporation in Coeur d’Alene, Idaho. He served as a foreign legal consultant for the Lehman, Lee & Xu law firm in Beijing, China and has more than 25 years of legal experience in the US.

Li Guo is a professor of law at Peking University in Beijing, China. He earned his LLB and LLD from Peking University, an LLM from Southern Methodist University, and an LLM from Harvard.

Table of Contents

About the Authors ix

Preface xi

Foreword xiii

Abbreviations and Acronyms xvii

Acknowledgments xxi

Introduction 1

Chinese Outbound Direct Investment and the European Union 5

§1.01 The European Union and China: A Maturing Partnership 5

[A] Strengthening Business Relationships with the EU 6

§1.02 Chinese Outbound Direct Investments 8

[A] China's Quest for Outside Business Opportunities 9

[B] China Going Global with ODI 12

[C] Destination of Chinese ODI to the EU 15

[D] ODI Diversity 15

§1.03 The Realization of the ODI 18

[A] China's Political Power Structure and ODI 19

[B] Regulatory Approval Processes for Chinese ODIS 21

[C] The Call for Free Market's Bigger Role 23

§1.04 Chinese Policies to Encourage Outbound Investments and Focus on Outward FDI in the EU 25

[A] China's ODI Policies and the Functions of the Main Governmental Bodies 25

[B] The Need to Upgrade Outbound Investments 32

[C] NDRC Lists Benefits Deriving from Increased ODI 33

[D] Chinese ODI Policies: Conclusion 34

§1.05 Distribution and Current State of Chinese ODI into The European Market: The Case of Italy 35

[A] EU Member States, Recipients of Chinese ODI 36

[B] Chinese Investors and the Four Fs: Fashion, Food, Furniture, and Ferrari 40

§1.06 Impact of Chinese Investments on the EU Economy 44

[A] Most Important Benefits of Investment from China 45

[B] Political Impacts of Chinese ODI 47

[C] Final Considerations on ODI 48

Strategies and Policies to Attract Chinese Investors in Europe 49

§2.01 An Introduction to the EU 50

[A] EU Organization 50

§2.02 Attracting More Chinese Investments In Europe 53

[A] The Proposed EU-China Investment Agreement 53

[B] The New Wealthy Chinese Entrepreneurs 54

§2.03 European Policies and Initiatives to Attract New Chinese Investments 55

[A] European Union Investment Policy 55

[B] Treaty of Lisbon 61

[C] Investment Promotion in the Member States 66

[D] Perceptions of the EU Investment Environment 70

§2.04 Distinction of the Chinese Investors 75

[A] Categories of Chinese Investors 75

§2.05 Risks Related to Chinese ODI for the European Economy 80

[A] Exposure to Macroeconomic Volatility and Unforeseeable Events 80

[B] Collateral Effects: Transfer of Technology and Headquarters 81

[C] The Effects of Political Influence 82

§2.06 Concluding Thoughts 82

[A] Chinese ODI and National Security 83

[B] Facilitating Chinese Investment in the EU 84

[C] Supporting Legal Certainty and Transparency 84

The Impact of New Reforms, and Further EU-China Policies 87

§3.01 New Wave of Reforms in China 87

[A] Coordinated Actions for Reform 89

[B] The World Bank's Experience Designing Economic Reforms 92

[C] Premier Li Keqiang's Vision 97

§3.02 New Reform Plan from Chinese Leadership 98

[A] Significance and Principles of the Decision Adopted at the Third Plenary Session 99

[B] Basic Economic System 100

[C] Modern Markets and the Government's Role 101

[D] Taxation Reform 102

[E] Urban-Rural Development and Land Reform 102

[F] A New Open Economic System 103

[G] The Political System 104

[H] Cultural Development and Social Services 105

[I] Social Governance 107

[J] Ecological Protection Management 107

[K] Defense and Army Reform 109

[L] Party Leadership 109

§3.03 Further Opening Up and Policies Influencing Investment 110

[A] The Shanghai Pilot Free Trade Zone 110

[B] China Clarifies Steps to Get Yuan Cross-Border Business Moving in Shanghai PFTZ 119

§3.04 The Importance of the Relationship with the EU 122

[A] Broader Access to Investment 123

A Changing China: Perspectives and Opportunities 125

§4.01 China 2030 125

[A] Emphasizing the Private Sector 127

[B] Increasing the Pace of Innovation 128

[C] Moving Up the Value Chain 129

[D] Seizing Green Development Opportunities 130

§4.02 Mutual Beneficial Relationships with the Rest of the World 133

[A] Implications of China's Further Development for Third Countries 134

[B] Key Issues in China's External Economic Relations 135

[C] Achieving Mutually Beneficial Trade and Investment Relations 137

[D] Internationalization of the China's Currency 138

[E] China as an Essential Partner in Global Governance 138

§4.03 The Growing Importance of the Financial Sector 140

[A] China's Financial System Development and Reforms 140

[B] Capital Account Liberalization and Renminbi Interest Rate Liberalization 144

[C] Financial Investments and the Role of RQFII and QFII 145

[D] The Recent Devaluation of the Yuan (Rmb) 154

[E] The Need for More Sophisticated Reform In the Financial Sector 154

§4.04 Reaching a Win-Win Solutions 155

[A] Greater Integration and Shared Goals 155

[B] A Changing China: Final Considerations 158

Chinese ODI in the EU Market: Upgrading the Existing Relationships 159

§5.01 The Complexity of Chinese ODI 160

[A] Specific Procedures and Requirements for Project Approval 161

[B] The EU Versus the United States: Current Scenario 162

[C] Chinese Business and Culture 163

§5.02 Chinese Investments in the EU and in the United States 166

[A] EU-China Investment Relations 166

[B] The EU Investment Environment for Chinese Investors 169

[C] The Impact of Chinese Investments in the EU 170

[D] Impact of increased Chinese Investment in the EU 173

[E] U.S. Trade Commission on the Assessment of Chinese ODI: Introduction 174

[F] Chinese ODI: Necessity or Menace 175

§5.03 Sectorial Distribution of Chinese Investments in the EU 176

[A] Focus on Technology 177

[B] Research and Development 177

[C] Service Sector 178

[D] Manufacturing and Greenfield Investments 178

§5.04 Intellectual Property Rights 179

[A] Intellectual Property Rights Protection and the EU 179

[B] New EU-China Intellectual Property Cooperation In Beijing 182

[C] Sino-European Cooperation in the Intellectual Property Sector 184

[D] China Further Strengthens IP Use and Protection 186

[E] China Boosts Innovation and Entrepreneurship 187

[F] China's Innovation Capacity 188

[G] International Cooperation: Implications for China 189

§5.05 EU-China Relations: The Status QUO and Planned Developments 190

[A] Priorities in the Development of Deeper Cooperation 191

[B] China-EU Cooperation: Final Remarks 194

Chinese Investment in the United States: A New Prospective 195

§6.01 China's Approach to the United States for Investment 195

[A] Chinese OFDI in the United States 197

[B] Impact of Chinese Investment in the United States 198

§6.02 Chinese Investments in the United States: the Players 199

[A] Money is Money, All Sources are Welcome 200

[B] Diversification Across U.S. Industries 200

§6.03 Chinese Investments in the United States: Preferred Industry Sectors 201

[A] U.S. Treasury Securities 201

[B] Real Estate 204

[C] Energy 206

[D] Technology 207

[E] Food and Agriculture 208

[F] Visas 209

[G] Transportation 210

[H] Metals and Mining 211

[I] Other Sectors 212

§6.04 Protection of Intellectual Property Rights in the United States 213

[A] United States IP System Structure 214

[B] Relevance of IP in the Merger and Acquisition Review 215

[C] United States' and China's Emphasis on IP Issues 216

[D] The "Online" Dimension 218

[E] U.S.-China IP Cooperation Dialogue 2014-2015 219

[F] U.S.-China IP Cooperative Dialogue 2016 224

[G] Stimulating New investments Opportunities 224

§6.05 U.S.-China Cooperation: Uneasy Bedfellows 225

[A] Reinforced Relations 226

[B] New Bilateral Investment Treaty 226

EU Competition Policy and Mergers and Acquisitions Control Regime 229

§7.01 The Regulation of "Concentrations" in the EU Market 230

[A] The Authority in Charge of the Merger Control Regime 232

[B] Joint Ventures Under the EU Merger Control Regime 234

[C] Applicable Turnover Thresholds 235

§7.02 Notification and Clearance Timetable 236

[A] Deadlines for Filing an M&A Transaction 237

[B] Preparing the Filing 237

[C] Different Phases of the Investigation 238

§7.03 Powers of the EU Commission and Remedies to Restore Competition 239

[A] The Commission's Authority to Prohibit, or Interfere, with a Proposed Transaction 239

[B] Other Applicable Remedies 241

§7.04 Other Involved Parties in M&A Transactions 242

[A] Third Parties Involved in the Review Process 242

[B] International Cooperation Among Authorities 243

§7.05 Dominance in the EU 248

[A] Dominance 249

[B] Objective of the EU Legislation 250

[C] Abuse of a "Dominance Position" in the EU 250

[D] Sanctions and Remedies 256

China Investment Corporation's Investment in the EU Market 259

§8.01 CIC: China's SWF and its Expansion in Europe 260

[A] United Kingdom: Open-Oriented and Direct Equity Investment 262

[B] Italy: Transparent Disclosure and Investment Portfolio 268

[C] Germany: Strong Regulatory Scrutiny and Indirect Outsourcing Investment 272

§8.02 Conclusion: Bilateral Depoliticization and Win-Win Mutual Trust 277

Conclusion 281

References 283

Appendix 1 293

Appendix 2 327

Index 329

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