CYIL vol. 9 (2018)

CYIL 9 ȍ2018Ȏ CHALLENGES OF BILATERAL INVESTMENT BETWEEN THE CZECH REPUBLIC AND CHINA or economic entities approved the AIIB proposals and joined the AIIB in order to promote the common developments. The Czech Republic is the first European country to sign the cooperation plan with China to jointly build the OBOR. 28 The president of the Czech Republic has also announced that “the Belt and Road Initiative brought up by Chinese President Xi Jinping is a grand proposition that would connect and benefit the countries along the routes.” 29 The great interest of the Czech Republic helps to build up and stabilize the bilateral investment between the two countries. This interest has showed a greater impact since China modified its Constitutional Law. On 11 March 2018, during the National People’s Congress, China amended its Constitutional Law which removed the term limits for the President and the Vice President. Article 79 of the 2004 amendment of the Constitutional Law requires that “the term of office of the President and Vice-President of the People’s Republic of China is the same as that of the National People’s Congress, and they shall serve no more than two consecutive terms.” 30 The 2018 amendment removed the second sentence, which means that the Chinese president may have the possibility to serve for a third term or even longer. This paper points out that this amendment makes a huge impact on the future of China’s policy, including investment policy. The OBOR would likely serve as the main strategic of China in the long run. With regard to bilateral investment, the Czech Republic shall be fully aware of China’s movement under the OBOR in relation to FDI, including general investment policy, the modifications of national rules on FDI, and the newly published foreign investment regulations. China shall also build up its realistic and practical FDI promotion and protection system which meets the expectations of its partner countries. Legal Concerns regarding BFI Investment policy represents the common attitude of one state towards FDI, which may help investors be aware of the investment environment of the host state. Investment policy is a combination of politics, economics, and law regarding FDI. This paper draws particular attention to the legal concerns regarding the BFI between the Czech Republic and China. 3.1 The Background of the Czech Republic-China BIT There is a foundation for the Czech Republic and China to promote and protect foreign investment from each other. The first Bilateral Investment Treaty (BIT) was signed on 4 December 1991 between the Czech and Slovak Federal Republic and China. At the time both Czechoslovakia and China were eager to attract foreign investment after the surviving the central planning economic system. A series of investment agreements during this generation established the basic FDI promotion and protection system. This system is a pre- condition for foreign investors to initiate the process of entering the market of a host state. However, the 1991 signed BIT came into force on 1 December 1992, and one month later Czechoslovakia split into two sovereign states, the Czech Republic and the Slovak Republic. 3.

28 Xinhuanet, 2017. 29 Xinhuanet, 2017.

30 The Constitution of the People’s Republic of China (the ffull text after the amendment of 14 March 2004), [accessed 16 May 2018].

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