CYIL vol. 9 (2018)

ANRAN ZHANG CYIL 9 ȍ2018Ȏ China and the Czech Republic. In an investment-friendly environment, both states will be fully aware of the challenges they may meet. Overview of FDI Flows and Foreign Investment Policy According to theWorld Bank’s Ease of Doing Business (2018 Report), the Czech Republic ranks 30 th overall, with a Distance to Frontier (DTF) point increase of 0.03%; China ranks 78 th overall, and its DTF points grew by 0.4%. The 2018 DFT of the Czech Republic is 76.27 which is a bit lower than the regional average (OECD high income) 77.46; while the 2018 DFT of China is 65.29 which is a bit higher than the regional average (East Asia & Pacific region) 62.70. Both these two countries are attractive in their respective regions for other foreign companies to operate their business in. In 2017, the Czech Republic had 1,623 million USD FDI outward flows (11.1% of the GDP), and 7,409 million USD inward flows (71.9% of the GDP); China had 101,914 million USD FDI outward flows (12.3% of the GDP) and 168,224 million USD FDI inward flows. (25.3% of the GDP). 6 The amounts of the FDI flows of the two countries differ significantly, however the amount of FDI comprising GDP show that both countries have a similar position with regard to FDI outward flow. 2.1 FDI Policy in the Czech Republic: A Difficult Dilemma The FDI Policy of the Czech Republic fully conforms to EU law and the Organization for Economic Co-operation and Development (OECD) standards in relation to equal treatment of both foreign and domestic investors. 7 The standards of EU law and the OECD provide a high level of legislation and well-established regulations in relation to FDI, from access to the fair and equal treatment of FDI. Moreover, the Czech Republic is also a member of international groups, in particular the Central and Eastern European Countries (CEE). 8 With a common historical and geographic background, the CEE countries meet frequently to establish their investment-related policy to achieve the common wealth. 2.1.1 Policy as a Member State of the European Union Article 207 of the Treaty on the Functioning of the European Union (TFEU) explicitly identified Foreign Direct Investment (FDI) as a part of the EU common commercial policy. As a MS of the EU, the Czech Republic shall follow the standard investment policy of the EU. According to the European Commission (EC), the EU investment policy aims to “ • open up foreign markets to EU companies 2. • make international investment rules clear and consistently enforced • protect the investments of EU citizens and companies abroad 6 OECD, ‘FDI in Figures Table 1’ (24 April 2018) < http://www.oecd.org/daf/inv/investment-policy/FDI-in- Figures-April-2018.pdf > [accessed 11 May 2018]. 7 U.S. Department of State Bureau of Economic and Business Affairs, ‘2015 Investment Climate Statement’ (May 2015) < https://www.state.gov/e/eb/rls/othr/ics/2015/241533.htm > [accessed 14 May 2018]. 8 OECD, Central and Eastern European Countries (CEECs) is an OECD term for the group of countries comprising Albania, Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, the Slovak Republic, Slovenia, and the three Baltic States: Estonia, Latvia and Lithuania (2 November 2001). • ensure EU companies are not discriminated against abroad • have a predictable and transparent business environment • attract international investment into the EU

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