Comparison of China's direct investment in Asia, Europe and America 中国在亚洲、欧洲和美洲的经济和直接投资比较

3.5 Economic risk: dealing with the next policy issue

Although the national security issue is a hot issue in the debate in the Asia, United States and Europe, policy makers are more concerned about the economic risks caused by China's capital flows. Because of the scale and growth of China's economy, the residual non market factors in China, and the resurgence of state capitalism and nationalism in place of the western consumer centric models, Asia has paid close attention to China. Unlike other countries, including China, Canada and Australia, the United States and Europe have been reluctant to include economic security in the investment review process and regard it as a direct concern. However, with the continuous growth of China's investment, these issues have attracted more and more attention from the United States and European countries. The United States and Europe are trying to find ways to deal with the "next generation" issue, which will increase the political risks that Chinese investors may face in the future.
A major economic concern is the asymmetry between China and the major OECD countries in terms of investment openness. Despite the policy of opening to the outside world, China is still the country with the most restrictions on the inflow of foreign direct investment among the G20 countries. In the past, China's foreign direct investment in developed economies was not large, which may not be a major problem. However, at present, many sectors of China's foreign investment are those that China does not open to foreign investors. For foreign-invested enterprises and private enterprises, China's business environment has deteriorated significantly in recent years. Therefore, the reciprocity of market opening has become an important part of the policy agenda. Karel de Gucht, EU trade commissioner, stressed that European enterprises "do not always receive the same treatment as European enterprises in China". He strongly called on China and Europe to sign a bit to expand the market access of European enterprises in China. E the US government has also expressed its position on the issue of market access. At an APEC summit in November 2016, President Obama warned China that "the United States will not stand idly by without the reciprocity we need in Sino US economic relations".
In addition, there are also some controversies about whether Chinese investment will have a negative impact on market-based competition and asset pricing. The core of the debate includes the behavior of state-owned enterprises and the choice of ensuring "competition neutrality". Policymakers and officials in Brussels are discussing the expansion of the existing "government funded" framework to include acquisitions from outside the EU, and require higher transparency and disclosure requirements for transactions conducted by state-owned enterprises. American scholars and policy makers have put forward a series of suggestions, including increasing monitoring and transparency, expanding the review process of CFIUS to include economic considerations (similar to the "net income" test conducted in Canada), and measuring the performance of enterprises after entering the market.
Some international organizations, including OECD and the United Nations Conference on Trade and development (UNCTAD), have proposed to establish a framework to ensure that state-owned enterprises and private enterprises are "competitive neutral". Recently, the United States and the European Union have stepped up their efforts to put forward some new initiatives. In 2016, US Deputy Secretary of State Robert Hormats announced that, The United States believes that state capitalism "poses a new challenge to the global consensus on open markets and private investment". 4! O the specific measures of the United States include: adjusting the negotiating text of bits, and new "next generation" economic agreements such as the trans Pacific Partnership (TPP). In May 2017, the United States and the European Union issued a set of "shared principles for international investment" to call for coordinated action, To deal with "challenges arising from the government's influence on commercial enterprises" (1).
Finally, Chinese enterprises are paying more and more attention to anti-monopoly and competition policy. In the past few decades, the operating environment of Chinese enterprises has been producer oriented, and the competition system guided by consumer welfare is still immature. The combination of different competition concepts and Chinese officials' claims that Chinese enterprises should "avoid non benign competition" in the competition for overseas assets is a dangerous signal for the competition regulatory authorities of developed economies. 図 the European Commission is considering to list all enterprises under the supervision of the state owned assets supervision and Administration Commission of China as a single corporate entity for the purpose of measuring their market share. Because these enterprises report to the same shareholder with control rights and are not subject to the constraints of competition agencies, it is necessary to prevent these enterprises from colluding or other types of abuse of market power. Chinese enterprises are also encountering more and more troubles in US courts and antitrust authorities. In 2017, several Chinese manufacturers of vitamin C were accused of "price manipulation" by the United States. These manufacturers defended that the Chinese Ministry of Commerce asked them to coordinate production to limit the decline in export prices. In the future review of China's M & A transactions with the United States, the fair and Federal Trade Commission will consider these special characteristics of Chinese enterprises, which seems inevitable.

CHAPTER FOUR

4.1 Conclusion
In the past, China was not a major direct investor to the Asia, United States and Europe, but the situation has changed since 2021. The high-pressure environment of China's internal competition and the attractive investment opportunities abroad have prompted the rise of a wave of business driven investment. By 2020, Chinese enterprises will invest about US $1 billion to US $2 billion globally, which will benefit the host country or region. At the same time, as China's investment in OECD countries increases, doubts about the political and economic risks that China's investment may bring will also increase. Maintaining the current investment pattern that is generally open requires the joint efforts of Europe, the United States and China.
Appropriate solutions. Determining the different definitions of "national security" in the United States, Europe and other developed economies, and estimating the differences in the review processes of these countries, can be a good start to keep investment open. However, it is surprising that the governments of OECD countries rarely coordinate in this aspect, although in addition, the cooperation among countries in security and existing military alliances is very close. FDI receiving countries with very open investment systems must also consider how to require China to achieve some reasonable goals, such as improving equal treatment in market access, without making investment openness a source of risk. The impact of atypical Chinese business and economic norms on the global market needs further analysis, because China is not only an exporter of manufactured goods, but also a source of competitive behavior and direct investment capital. There is no consensus on how to define, measure or observe the unfair impact of a country's domestic capital cost on global prices.
To solve the problem, China needs to make joint efforts. The worry about China's investment is not imaginary, but based on the special nature of China's existing political and economic system. Doubts about Chinese enterprises stem from the relationship between the Chinese government and the enterprise sector. If the top decision-makers of China's state-owned enterprises are appointed by the Communist Party and are responsible for them, the management decisions usually include political considerations, and enterprises can obtain loans at will regardless of their prospects, then foreigners can not be accused of doubting the bottom line of these enterprises. Instead of criticizing foreign protectionism, China should take the following more constructive measures: domestic reform to enhance transparency, improve the level of corporate governance, create a fair competition environment between private enterprises and state-owned enterprises, improve the market access of foreign enterprises, implement a highly credible consumer oriented competition policy, and reduce interference in overseas investment decisions of enterprises.
As a new global investor, China has opened a new window for the establishment of a new multilateral system for global investment governance. As China and other emerging economies shift from complete investment control to more complex systems, which are reviewed by foreign countries in terms of national security and competition, regional liberalization has become a global problem. In order to prevent confrontation, renewed efforts are needed to harmonize international norms in these areas. At the same time, the growth of China's foreign direct investment has made the focus of China's economic policy include the concern about the openness of global investment and protectionism. What is unprecedented in history is that the United States, the European Union and China - the three largest economies in the world - are closely linked in safeguarding an open, fair and mutually beneficial global investment environment.
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ACKNOWLEDGEMENT
I would like to express my appreciation to my supervisor Professor. Eric and the Assistant supervisor Professor Wang Yuan whose valuable guidance has been the one that helped me patch this research and make it full proof success. Their suggestions and instructions have served as the major contributor towards the completion of the research.