THE BUREAUCRATIC HEAVY HAND IN CHINA - LEGAL MEANS FOR FOREIGN INVESTORS TO CHALLENGE AGENCY ACTION

The Chinese government has aimed to modernize its economy in part by a ttracting foreign investment. Foreign investors have shown keen intere st in China, yet they have also encountered serious problems and disin centives. Among the most important of these has been China's unstable legal and regulatory framework. This Note focuses on one aspect of thi s problem-extensive, ad hoc, and inconsistent regulation by administra tive agencies (what the author calls ''bureaucratic overreaching''). A dministrative agencies in China possess broad de facto and de jure pow ers. These powers, together with the discretionary nature of the forei gn investment regulatory system, facilitate the problem of bureaucrati c overreaching. Yet notwithstanding administrative agencies' broad pow ers, Chinese law offers foreign investors a number of (often overlooke d) means to challenge improper agency action, including remedies avail able under the Administrative Litigation Law and, of less importance, the foreign investment laws. Through an analysis of the statutory law and selected cases decided thereunder, the author concludes that these remedies have the potential to offer significant protection to foreig n investors. Nonetheless, while some of these remedies have practical usefulness-and are increasingly relied upon by Chinese citizens and bu sinesses-their usefulness is constrained by systemic weaknesses of the Chinese legal system.