Regulation of cross-border establishment in China and the EU : a comparative law and economics approach / Guang Shen.
2016
K1301 .S53 2016 (Map It)
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Details
Author
Title
Regulation of cross-border establishment in China and the EU : a comparative law and economics approach / Guang Shen.
Published
Cambridge, United Kingdom : Intersentia, [2016]
Call Number
K1301 .S53 2016
ISBN
9781780684147
1780684142
1780684142
Description
xviii, 301 pages ; 24 cm.
System Control No.
(OCoLC)1003192968
Summary
"This book examines the regulation of the inter-provincial establishment of companies in China and the EU regulation of the cross-border establishment of companies from the perspective of comparative law and economics. Part I of this book discusses the rules governing inter-provincial establishment in China and examines their implementation, with a focus on revealing the barriers to this activity. This part also analyzes the evolution of the EU internal market and shows how the EU regulates the cross-border establishment of companies. Subsequently, Part II presents an economic analysis of the regulation of the crossborder establishment of companies in a multi-level jurisdiction. In Part III, the regulation of the inter-provincial establishment of companies in China is reviewed in the light of the economic literature. This section also analyzes the differences between the regulation of the inter-provincial establishment of companies in China and the EU regulation of the cross-border establishment of companies. This book offers a thorough analysis of the regulation of business establishment in China and, more generally, the law and economics literature on business licensing"--Page four of cover.
Note
"METRO"--Front cover.
Dissertation Note
Doctoral Maastrichts Europees Instituut voor Transnationaal Rechtswetenschappelijk Onderzoek 2012.
Bibliography, etc. Note
Includes bibliographical references (pages 267-298).
Series
Record Appears in
Table of Contents
Acknowledgements
v
List of Abbreviations
xvii
ch. 1
Introduction
1
1.
Societal Problems
1
2.
Scientific Relevance
2
3.
Research Questions
3
4.
Methodologies
3
5.
Structure
4
pt. I
LEGAL ANALYSIS
ch. 2
Regulation of the Inter-provincial Establishment of Companies in China
9
1.
Introduction
9
2.
Rules Concerning the Establishment of Domestic Companies
10
2.1.
Initiator Requirements
11
2.1.1.
Initiator Numbers
12
2.1.2.
Initiator Qualifications
12
2.2.
Capital Requirements
13
2.2.1.
Minimum Capital Requirements
13
2.2.2.
Capital Forms
13
2.2.3.
Capital Contributions
14
2.3.
Articles of Association
14
2.4.
Procedural Requirements
16
2.4.1.
Steps to Incorporate a LLC
16
2.4.2.
Acquiring a Notice of Pre-approval of the Company Name
17
2.4.3.
Applying for Establishment Registration
17
2.4.3.1.
Rules on How to Fulfil Establishment Registration
18
2.4.3.2.
Obtaining Approval for the Establishment of a Company
20
2.4.3.3.
Approval for Licensed Operations
22
2.4.3.4.
Establishment Registration of Companies
31
2.4.3.5.
Remedies of the Refusal of a License Application
32
2.5.
Summary
35
3.
Regulations on the Establishment of FIEs
35
3.1.
Capital Requirement of a WFOE
36
3.1.1.
Amount of Registered Capital
36
3.1.2.
Capital Forms
37
3.1.3.
Capital Contributions
40
3.2.
Capital Requirement of a JV
40
3.2.1.
Amount of Registered Capital
40
3.2.2.
Capital Forms
40
3.2.3.
Capital Contributions
42
3.3.
Procedural Requirements for the Establishment of an FIE
43
3.3.1.
Steps to Establish an FIE
43
3.3.1.1.
DRC Project Approval
43
3.3.1.2.
Commerce Department Approval
47
3.3.1.3.
Approval of Industry Regulators (if Necessary)
48
3.4.
Summary
49
4.
Rules on the Inter-provincial Establishment for Companies in China
50
4.1.
Rules on the Inter-provincial Establishment by Domestic Companies
50
4.1.1.
Rules in Terms of Establishing Subsidiaries
50
4.1.2.
Rules Regarding Establishing Branches
51
4.1.3.
Policies to Facilitate the Cross-regional Establishment of Branches and Subsidiaries
52
4.1.4.
Summary
56
4.2.
Rules on Inter-provincial Establishment by FIEs
56
4.2.1.
Rules in Terms of Establishing Branches
56
4.2.2.
Rules in Terms of Establishing Subsidiaries
57
4.2.2.1.
Capital Requirements
59
4.2.2.2.
Procedural Requirements for the Establishment of Subsidiaries
60
4.2.3.
Summary
62
5.
Reality of Cross-provincial Establishment by Domestic Companies
63
5.1.
Classification of Barriers Faced by Companies
64
5.1.1.
Abuse of Administrative Powers
64
5.1.2.
Under-enforcement of State Regulations and Policies
65
5.2.
Xia, Lu and Yu's Essay on the Creation of Obstacles for the Inter-provincial Establishment by Local Governments
67
5.3.
Restrictions on the Freedom of Establishment Created by Various Authorities at Local Levels
70
5.3.1.
Hampering of the Freedom of Establishment by Licensing Authorities
70
5.3.2.
Possibility for other Institutions to Impose Barriers
73
6.
Practice of the Cross-provincial Establishment by FIEs
74
6.1.
Difficulties to Obtain Licenses
74
6.1.1.
Imposing Licensing Requirements in Excess of Authority
75
6.1.2.
Delay in Granting Licenses
80
6.1.3.
Variable Licensing Practice
81
6.1.4.
Increased Difficulties to Acquire Licenses from MOFCOM in the Retail Field
82
6.2.
Local Authorities' Support to Acquire Licenses
82
6.2.1.
Local Agencies' Preference for Granting Licenses to FIEs
82
6.2.2.
Recognizable Ways to Support FIEs' License Obtainment
84
6.2.3.
Reasons to Assist FIEs with the Acquisition of Licenses
87
6.3.
Local Authorities' Assistance other than License Obtaining Facilitation
89
7.
Rules Coping with Administrative Monopolies in China
91
7.1.
Provisions of the State Council on Prohibiting Regional Blockades in Market Economic Activities
91
7.2.
Administrative License Law
94
7.2.1.
Other than Lawful Authorities Exercising Licensing Authority
98
7.2.2.
Arbitrary Range of Licensing Items
99
7.2.3.
Violation of Article 15(2)
102
7.3.
Anti-Monopoly Law
105
7.4.
Limits of Dealing with Administrative Monopolies through Legislation in China
108
8.
Causes for the Widespread Occurrence of Barriers to Inter-provincial Establishment
109
8.1.
Deficient Contents of National Law
110
8.2.
Undesirable Implementation of National Law
110
8.2.1.
Problems of Administrative Remedies
111
8.2.2.
Absence of Judicial Review of the Establishment of Illegal Licensing Regimes
112
9.
Important Changes in the Regulation of Establishment Following the Reform Measures 2013
115
9.1.
2013 Reform Concerning the Regulation of Establishment
115
9.1.1.
Business Deregulation as Main Changes
115
9.1.1.1.
Removing the Requirements of Capital and Licensing for the Establishment of Domestic Companies
116
9.1.1.2.
Creating a Record-filing System for the Establishment of FIEs
117
9.1.2.
To Sustain Economic Growth through Deregulation
117
9.1.3.
Social Background of the Business Deregulation
118
9.1.3.1.
Curbing the Abuse of Licensing Power to Provide Economic Impetus
118
9.1.3.2.
Launching Pilot Business Registration Reforms in a Number of Regions
120
9.1.3.3.
Extending the Deregulation of Establishment to the Entire Nation
120
9.1.3.4.
Fighting Corruption
121
9.1.3.5.
Leading to Inter-jurisdictional Competition to Ease Control on Market Access
122
9.1.3.6.
Summary
123
9.1.4.
Possible Reasons for Shanghai to Agree to Initiate Business Deregulation
124
9.1.5.
Prospects for the Business Deregulation Test
126
9.1.5.1.
Driving Forces from the President and the Premier to Sustain Economic Growth
126
9.1.5.2.
Opposition from Central Regulators for Department Interests
127
9.1.5.3.
Support from Local Areas to Win Investment
131
9.1.5.4.
Summary
134
9.2.
Amendment to Company Law on the Basis of the 2013 Initiatives
134
10.
Conclusion
134
ch. 3
EU Regulation of Cross-border Establishment of Companies
137
1.
Introduction
137
2.
Evolution of the Internal Market
137
2.1.
From the Treaty of Rome to the Single European Act
138
2.1.1.
Treaty of Rome: Providing for Negative Integration and Positive Integration
138
2.1.2.
CJEU: Introducing Mutual Recognition
139
2.1.3.
Commission: Bringing in Legislation Based on Negative Integration and Positive Integration Measures
139
2.2.
From the Single European Act to the Maastricht Treaty
140
2.2.1.
Single European Act: Institutionalizing Minimum Harmonization
140
2.2.2.
CJEU: Delimiting the Scope of the Free Movement of Goods and Taking a Purposive Approach to Treaty Interpretation
141
2.2.3.
Commission: Introducing Legislation Based on Minimum Harmonization
141
2.3.
From the Maastricht Treaty to the Lisbon Treaty
142
2.3.1.
Treaty Amendments: Creating an Economic and Monetary Union and Assigning the Internal Market to Shared Competence
142
2.3.2.
CJEU: Refining the Scope of the Union's Competence and Ensuring Effective Use of Power
143
2.3.3.
Commission: Turning to Maximum Harmonization
144
3.
EU Regulation of Cross-Border Establishment of Companies
145
3.1.
Treaty Provision on Freedom of Establishment of Companies
145
3.1.1.
Freedom of Establishment of Companies
145
3.1.2.
Derogation from the Freedom of Establishment of Companies
146
3.2.
Judicial Interpretation on the Freedom of Establishment of Companies
146
3.2.1.
C-81/87 The Queen v Treasury and Commissioners of Inland Revenue, ex parte Daily Mail and General Trust PLC, [1988]ECR 5483
146
3.2.2.
C-212/97 Centros Ltd v Erhvervs-og Selskabsstyrelsen, [1999] ECR I-1495
147
3.2.3.
C-208/00 Uberseering BV v Nordic Construction Company Baumanagement GmbH, [2002] ECR I-9919
148
3.2.4.
C-167/01 Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd, [2003] ECR I-10155
150
3.2.5.
C-210/06 CARTESIO Oktato es Szolgaltato bt, [2008] ECR I-09641
151
3.2.6.
Main Trends in the Case Law on the Freedom of Establishment
152
3.3.
Provision of the Services Directive on Establishment of Service Providers
153
3.3.1.
Authorization Schemes
153
3.3.2.
Prohibited Requirements
154
3.3.3.
Suspect Requirements
155
3.3.4.
Actual Effect of the Directive Provision on Cross-border Establishment
155
4.
Removing Remaining Barriers to Cross-border Establishment
156
4.1.
Remaining Barriers to Cross-border Establishment
156
4.2.
Tackling the Remaining Barriers through Intergovernmental Negotiations and Judicial Integration
157
5.
Conclusion
160
pt. II
THEORETICAL FRAMEWORK
ch. 4
Economic Analysis of the regulation of the Establishment of Companies
163
1.
Introduction
163
2.
Theory of Regulation
164
2.1.
Public Interest Approach
164
2.2.
Private Interest Approach
167
2.3.
Regulatory Instruments in the Set-up Process
169
2.3.1.
Registration
169
2.3.2.
Licensing
170
2.3.2.1.
GSL (General Set-up Licensing)
171
2.3.2.2.
SSL (Sectoral Set-up Licensing)
172
2.3.3.
Certification
174
2.3.4.
Minimum Capital Requirements
174
2.4.
Other Legal Instruments to Internalize Externalities in Establishment
174
2.4.1.
Coase Theorem
174
2.4.2.
Pigouvian Tax
175
2.4.3.
Market Based Instruments
176
2.4.4.
Liability Rules
177
3.
Market Failure Justifications for Regulation in the Set-up Process
177
3.1.
Externalities
178
3.2.
Information Asymmetry
179
4.
Choosing Regulatory Instruments to Tackle Market Failure in the Set-up Process
180
4.1.
Opting for Regulatory Instruments to Tackle Externalities
180
4.2.
Choosing Regulatory Instruments to Remedy Information Asymmetry
181
4.3.
Summary
183
5.
Private Interest Considerations for Licensing in the Set-up Process
183
6.
Economic Approach to Minimum Capital Requirements in the Set-up Process
186
6.1.
Market Failure Justifications for Minimum Capital Requirements in the Set-up Process
186
6.1.1.
Information Problems
186
6.1.2.
Externalities
190
6.2.
Private Interest Explanations for Minimum Capital Requirements in the Set-up Process
191
7.
Conclusion
194
ch. 5
Law and Economics View on Centralization of the Regulation of the Cross-border Establishment of Companies
197
1.
Introduction
197
2.
Economic Analysis of the Regulation of the Cross-border Establishment of Companies
197
2.1.
Public Interest Reasons for Regulating the Cross-border Establishment of Companies
197
2.2.
Private Interest Explanations for Regulating the Cross-border Establishment of Companies
198
3.
Economics of Federalism
199
3.1.
Competitive Federalism
199
3.2.
Fiscal Federalism
200
4.
Economic Arguments in Favour of Centralization
201
4.1.
Internalizing Trans-boundary Externalities
201
4.2.
Avoiding a `Race to the Bottom'
201
4.3.
Reducing Transaction Costs and Profiting from Scale Economies
203
5.
Centralization of the Regulation of the Cross-border Establishment of Companies from an Economic Perspective
204
5.1.
Trans-boundary Externalities
204
5.2.
Race to the Bottom
205
5.3.
Economies of Scale and Transaction Costs
207
6.
Centralization and Internal Market
209
7.
Public Choice Analysis of the Centralization of the Regulation of the Cross-border Establishment of Companies
210
8.
Conclusion
212
pt. III
ECONOMIC EVALUATION
ch. 6
Economic Analysis of Regulation of the Inter-provincial Establishment of Companies in China
217
1.
Introduction
217
2.
Regulation of the Inter-provincial Establishment of Companies in China
218
3.
Public Interest Analysis of Regulation of Inter-Provincial Establishment in China
218
3.1.
Public Interest Reasons for Having Different Requirements for Inter-Provincial Establishment and General Establishment
219
3.2.
Public Interest Reasons for Regulating the Inter-Provincial Establishment of Companies at Central Level
219
3.2.1.
Disadvantages of Centralization
219
3.2.2.
Trans-boundary Externalities
223
3.2.3.
Race to the Bottom
224
3.2.4.
Scale Economies and Transaction Cost Savings
226
4.
Private Interest Analysis of the Regulation of the Inter-Provincial Establishment of Companies in China
227
4.1.
Interests of the Actors Involved in Having Different Requirements for Inter-provincial Establishment and General Establishment
227
4.1.1.
Local Officials
227
4.1.1.1.
Promotion
228
4.1.1.2.
Corruption
230
4.1.2.
Local Industries
231
4.1.3.
Other Industries
232
4.1.4.
Interview Results
233
4.1.4.1.
Access Barriers Erected by Local Licensing Authorities
233
4.1.4.2.
Interests of Officials in Creating Entry Barriers
234
4.2.
Interests of the Actors Involved in Centralization of the Regulation of Inter-provincial Establishment
237
4.2.1.
Regulators of Inter-provincial Establishment
238
4.2.2.
SOEs under the Jurisdiction of the Regulators
239
5.
Conclusion
243
ch. 7
Regulation of the Inter-provincial Establishment of Companies in China: Learning from Europe?
245
1.
Introduction
245
2.
Comparative Law and Economics: The Importance of Considering Institutional Differences in Comparative Study
246
3.
EU Regulation of Cross-border Establishment
247
3.1.
Institutional Aspects
247
3.2.
Remaining Barriers to Cross-border Establishment
248
3.3.
Ways to Tackle the Remaining Barriers
248
4.
Regulation of Inter-provincial Establishment in China
248
4.1.
Institutional Aspects
248
4.2.
Barriers to the Inter-provincial Establishment of Companies
249
4.3.
Existing Ways to Tackle the Barriers
250
5.
Insights from Standards versus Rules Debate on China Learning from the EU
250
6.
Conclusion
252
ch. 8
Conclusions
255
1.
Research Questions and Summary of Findings
255
2.
Policy Recommendations
259
3.
Academic Achievements
261
4.
Limits
261
5.
Future Research
262
Valorisation Addendum
263
Bibliography
267
Curriculum Vitae
299