Comparative study of foreign investment laws: The case of China and Ghana

Abstract

This article provides a comparative legal study of some relevant features of the Chinese and Ghana Foreign Investment Laws (FIL), keeping in mind the differences in both countries constitutions and legal systems. Ghana is comparatively more developed, socially and economically, than other countries in sub-Saharan Africa and as such perceived by other scholars and foreign investors as a suitable place for foreign investments partly due to a suitably educated workforce, cheap labor costs and it natural resources. However, the effect of the foreign investments in accelerating the development of the country is a concern though the government seeks to attract gigantic foreign investment, which is also regarded as a possible solution to the mounting current account shortage problem. On the other hand, China has shown a reliable flow in FDI influxes in spite of its economic slowdown and marked legal reforms in current years. Are there available lessons for Ghana from the advantages (and shortcomings) of the Chinese Foreign Investment Regulation? Of course, Yes, Ghana can definitely learn from China’s “national investment policy-making,” though the benefits derived from this comparative study can be mutual.

Keywords:

• investments
• Foreign investment laws
• policies

Public Interest Statement

Foreign Investment is a powerful force for economic growth and development throughout the world. Although economic forces are the vital drivers of foreign investment, they are not the single influential factors. Foreign investment laws (FIL) differ from country to country and for that purpose, aspects of FIL between China and Ghana were reviewed.

FIL classifies the investors and the investments the country wishes to attract; from the investor’s viewpoint, it identifies the way in which the investment might be organized in order to profit from the agreements’ protection. Investing abroad offers numerous benefits that would not essentially accrue from local investment, such as huge returns and also increased protections. For example, transferring production to a foreign country may allow a company closer and easier access the local markets of that country, and to cut expenses by taking advantage of lesser labor costs, favourable tax rates, and less rigorous regulations.

Additional information

Notes on contributors

Shirley Ayangbah

Shirley Ayangbah and Liu Sun have published peer-reviewed article in the area of investor arbitration. Our key research activities include foreign investment law (FIL), international trade law and intellectual property rights.

The information in the current perspective article is useful for global entrepreneurship for research purposes and also serve as a guide to other foreign investors who want to invest in Ghana and China. Ghana is gifted with a lot of natural resources such as gold, diamond, oil, etc. China in recent years has become one of the most important host countries worldwide and the most important one among developing countries. This article is original not only in approach, but also because it uses the specific case of China and Ghana to add new perspectives, insights and value to the existing discourse on international investment law. The findings of the research may have a practical implication to other developing countries and the study may be replicated in another African country.