Washington International Law Journal


Jordan Brandt


Ever since China instituted its “open-door policy” (gai ge kai fang) in 1978, the historically autarkic and largely mysterious country has morphed through external interactions with foreign countries and corporations into a hotbed for foreign investment activity. This foreign investment activity has forever changed China’s standing in the global community; today, China stands firm and elevated amongst the ranks of the globalized community as one of the leaders in attracting foreign investment. This article examines China’s rise as an economic power through the use of its foreign investment laws. It then compares the experience of China, a communist country with 1.4 billion people, to the United States’ capitalistic model roughly one-fifth the size. This article will consider the two countries’ distinct histories of foreign investment along with their respective laws and regulations. China has a history of encouraging foreign investment in certain areas while the United States has become increasingly resistant to investment by foreigners in what it considers national security areas. While China’s burgeoning economy has benefited substantially from its foreign investment framework, China may attempt to follow the United States’ lead and impose further restrictions on where foreigners can and cannot invest in Chinese industries. Ultimately, the reader will be offered a glance into the distinctive features of the foreign investment regulatory framework of each country.

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