Regulatory Scope and Legal Supervision Modes of Overseas Investment between China and the United States from the Perspective of Comparative Law

DOI: https://doi.org/10.62517/jel.202514507

Author(s)

Zixuan Li

Affiliation(s)

Faculty of Law, Macau University of Science and Technology, Macau, China

Abstract

In the context of economic globalization, the overseas investment management laws and regulations of China and the United States exhibit significant differences. This paper conducts a comparative law analysis of the United States’ Outbound Investment Program and China’s Administrative Measures of Overseas Investment and Administrative Measures of Overseas Investment by Enterprises. Focusing on regulatory scope and legal supervision modes, the study aims to deeply explore the legal characteristics of both countries in managing outbound investments. The analysis reveals that China’s regulations emphasize broad coverage and pre-investment approvals to ensure national economic security and guide enterprise activities toward sustainable development. In contrast, the United States adopts a targeted approach, restricting investments in specific high-tech sectors and regions to protect technological advantages and national interests. By examining these differences, the paper highlights how China’s framework provides stability and risk mitigation but may introduce procedural complexities, while the U.S. model offers flexibility and efficiency yet risks delayed oversight. This comparative perspective underscores the balance between safeguarding national interests and fostering international economic cooperation. The findings suggest opportunities for mutual learning, such as simplifying procedures in China to enhance enterprise competitiveness and strengthening preemptive measures in the United States for better risk management. Ultimately, understanding these regulatory divergences can inform more effective frameworks for global investment, promoting transparency, compliance, and mutual benefits in cross-border economic activities.

Keywords

Outbound Direct Investment; National Security Technologies; Investment Approval Systems; Comparative Regulatory Frameworks; Economic Risk Management; Global Investment Strategies

References

[1]Taylor Veronica L. “Regulatory Rule of Law.” Regulatory Theory: Foundations and Applications, edited by Peter Drahos, ANU Press, 2017, pp. 393-414. [2]Kerner A. “What We Talk About When We Talk About Foreign Direct Investment.” International Studies Quarterly, vol. 58, no. 4, 2014, pp. 804-15. [3]Smith G, Paul D’Arcy. “Introduction: Global Perspectives on Chinese Investment.” Pacific Affairs, vol. 86, no. 2, 2013, pp. 217-32. [4]Daniel O’Neill. “Playing Risk: Chinese Foreign Direct Investment in Cambodia.” Contemporary Southeast Asia, vol. 36, no. 2, 2014, pp. 173-205. [5]Eichensehr K E, Cathy H. “National Security Creep in Corporate Transactions.” Columbia Law Review, vol. 123, no. 2, 2023, pp. 549-614. [6]Meidan M, Luke P. Business and Politics in China’s Overseas Investments. Danish Institute for International Studies, 2016. [7]Negara S D. “Revisiting the Belt and Road Initiative in Indonesia: Progress, Challenges, and Prospects.” Journal of Southeast Asian Economies, vol. 41, no. 1, 2024, pp. 28-46. [8]Macheda F, Liu J X. “The Role of State-Owned Enterprises in Promoting High-Quality Economic Development: The Case of China.” World Review of Political Economy, vol. 16, no. 1, 2025, p. 26, 82. [9]Zi Y Y. “Global Capital, Local Dynamics: Unravelling Labor Relations in Chinese Foreign Direct Investment within South Africa’s Industrial Relations.” Zanj: The Journal of Critical Global South Studies, vol. 8, no. 1/2, 2025, pp. 105-136. [10]Scissors D. The Tariff Hiccup Slows China’s Outbound Investment, but Construction Gains. American Enterprise Institute, 2025. [11]Chase P. The Missing Partnership: The United States, Europe, and China’s Economic Challenge. German Marshall Fund of the United States, 2020. [12]Chaisse J. “National Security Unbound: U.S. Investment Screening from Inbound and Outbound.” Georgetown Journal of International Law, vol. 56, no. 2, Winter 2025, pp. 425-498. [13]Hu C. “Analysis of the America First Investment Policy and Outbound Investment Rules.” US-China Law Review, vol. 22, no. 3, March 2025, pp. 139-152. [14]Raslan R A A. “Climbing up the Ladder: Technology Transfer-Related Policies in the Context of the Belt and Road Initiative.” Utrecht Law Review, vol. 20, no. 1, 2024, pp. 19-43. [15]Sang B C, et al. “Evolution, Impact, and Responses to US Restrictions on Technological Investments in China.” Journal of WTO and China, vol. 15, no. 1, 2025, pp. 58-83.