Volume 4
Legal certainty for direct investment in the People's Republic of China using the example of the automotive industry

Himmelmann

Law Seminar of the University of Oldenburg China's economic performance has increased at a breathtaking pace since the reforms 20 years ago, but especially in the 1990s. As one of the most attractive domestic markets, the country has seen a steep upward curve in foreign direct investment. This is particularly true of the almost euphoric phase following the legal reforms at the beginning of the 1990s. The motives for investment are extremely varied and generally long-term. This is precisely why the factor of legal certainty could be a particularly sensitive point for investment decisions.
Legal certainty in the sense of the German legal tradition has many facets, including the separation of powers, the safeguarding of fundamental rights, the legality of the administration and its judicial control. The "codified framework for legal certainty in China" shows that the standard of legal certainty achieved still lags far behind that of Western countries. Nevertheless, the author sees opportunities for the development of greater legal certainty due to foreign investment and the possibilities for foreign companies to exert influence on legislation through lobbying. In this respect, there is an interdependence between legal certainty and foreign direct investment. The example of the automotive industry, which still plays a leading role for German investments in China, is an excellent way of illustrating this ongoing process.

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