ABSTRACT
The 1982 Constitution of the People's Republic of China (PRC Constitution) Article 18 introduced for the first-time principles of openness and protection for foreign enterprises while sanctioning general limitations for foreign investors such as compliance with domestic laws. China's policy towards foreign investment, both at the domestic and international levels, has changed significantly during the past 40 years. Recently negotiated Chinese international investment agreements incorporate language that ensures more significant protection towards foreign enterprises and establish the regulatory conditions to further open different sectors of the Chinese market to their access. Conversely, through domestic-level legislation changes, Chinese authorities have established special economic zones that further opened the Chinese market to foreign enterprises in those specifically regulated areas.
The Chinese Constitution has been updated several times during the past four decades; in contrast, Article 18 has remained the same. This chapter examines Article 18 of the PRC Constitution and assesses the compatibility with the new policies.
The chapter analyses the development of foreign investment practices and regulations in China, to demonstrate how foreign investment can be instilled into the PRC Constitution Article 18. Since China's reform and opening-up, the country has implemented an innovative and expanding practice for the protection of foreign investment. This article demonstrates that such expansion has changed the connotation of the PRC Constitution Article 18 through a gradual development of greater market access and additional protections of foreign investment in contrast with the stable denotations of Article 18, that indicates a progressive adaptability of the PRC Constitution.
