The Protection of Foreign-Owned Business in the People's Republic of China

China has been a socialist country in political system since 1949 that is different from capitalist countries. Since its foundation the Party and the government paid more attention to the social reform, mainly in the aspect of “consciousness clearing” and “class struggle.” On the opposite the economic development had been deviated from the rational normality. At the beginning of the establishment of the People’s Republic of China, the production of agriculture and industry was emphasized, but the “Great Leap policy” was against scientific economical theory. After then [during 1960-1978] the country’s economy had been ignored to a large extent, especially the “Great Cultural Revolution” that the social order had once been destructed and the economy deterred still, even back-ward. However, only after 1978 the Government started to emphasize the economy reform, especially in commerce field. Foreign investment in China started to boom up since 1980s. Foreign direct investment (FDI) has experienced approximately two decades’ existing and growing in China, the national legal system to protect FDI has gradually constituted.Though China is not with a full member state in WTO, however, it has applied for the World Trade Organization, which has of course the same rights & obligations as a member of WTO. Even though PRC, as the biggest developing country in population and land, has over 250,000 foreign-invested enterprises incorporated according to Chinese law at the end of 1990s. China, as a host state, takes the duty to protect foreign investment enterprises (FIE). In conformity with the Chinese Constitution and the International Convention agreed, the legal framework for FIE has been established. As to the host state measures to foreign-owned businesses on admission, ownership / control and operations, which is affected by international treaty obligations that grant foreign investors MFN, national treatment and protection against expropriation, will be referred to on the followed.