The Extraterritorial Effect of Administrative Law from the Perspective of Legal Supervision of China’s QDII System
|School||East China University of Political Science|
|Course||Constitutional and Administrative Law|
|Keywords||QDII Administrative Law Investment risk Financial regulation|
With its entrance into the WTO and the rapidly development of domestic economic, The capital market of our country is integrating into the international capital market step by step. During this important transitional period, China introduces the QDII in April 2006. QDII is an arrangement mechanism of cross-border flowing of capital. The introduction of QDII broadened legal investment channels for the investors of our country, and brought a lot opportunity to the investors of our country to participate in the international capital market.The first chapter of this thesis introduces the extraterritorial effects of administrative law. In accordance with the theory of base determines the superstructure, each revolutionary change in the economic basis is then followed by a transformation of the superstructure including the law. The focus of this chapter is the sources of effectiveness of economic administrative law or regulation. Upon the initial findings from section one, section two will discuss the change process of administrative supervision in economy with the main line of the evolution of economic theory. The whole chapter lay the foundation for chapter two to introduce the advantages of the QDII systemThe second chapter focused on risks may arise during the implementation of QDII system in our country. In general, the implementation of QDII system of a country is bound to face the risks of fluctuation of interest rate and exchange rates. And also it has to face other market risk such as overseas operational risk and transnational supervision risk. According to China’s special conditions, our implementation of QDII may strengthen the trend of foreign currency capital out-flowing, thereby divert domestic funds and adversely impact on the security market. Furthermore, the domestic institutional investors lacking of experience in overseas investment, may lead to cross-border investment risk and the risk of inadequate supervision.The chapter three argues about some successful examples of supervision from foreign countries and their supervision theory in order to provide some advice to improve our QDII system. Since the QDII system originated from aboard, and after a long period of practical and theoretical exploration, these countries have formed a set of more comprehensive monitoring system. These are very valuable experience for us to improve our system design.The Chapter four leads to a conclusion that in order to evade the risk of QDII system and to strengthen the controllability of the open capital account, we must improve the legal system of QDII. This chapter analyzes the QDII system in our existing legal environment which faces the actual needs of the liberalization of capital projects and introduces a specific legal framework to prevent the risks of QDII system. These suggestions including strict selection of the investors, carefully examine the institutional investor’s qualification; standardize the investment operation of QDII, lead QDII to implement internal control mechanism, strengthen the disclosure of information, form the effective external monitoring; strengthen supervision cooperation at the same time.Until now, research on the QDII system is particularly prevalent in the economics. There are few people carrying on research in terms of administrative law. In this paper, the innovation lays in the fact that researches approach of using the administrative law theory to combine with economy and carefully analyze the special characteristic of China’s QDII system as well as propose measures of improving supervision of risk.