Comparative Study of Foreign Investment Protection Regulations in Shanghai and Shenzhen Special Economic Zones

One of China's most important tools for achieving economic reform goals, both at the policy-making and legislative levels, has been the use of special economic zones. China's successes in this area have made the study of this significant tool remarkable. In this context, studying the special economic zones of Shanghai and Shenzhen is particularly considerable. This is because, first, the regulations of other special economic zones in China have been influenced by the regulations of these two regions, and second, the economic successes of these two zones have been more remarkable. Therefore, this article aims to explain the background of the establishment of special economic zones in China, review the governing regulations of these two regions, and elucidate their similarities and differences. This research shows that the formation of these zones is based on political and economic reforms of the People's Republic of China in the last quarter of the twentieth century. Likewise, according to the constitution, the 'State Council' is the related responsible institution in this regard. In both regions, the legislature has granted various facilities to foreign investors to protect foreign investment and has deemed the principle of " Pre-establishment National Treatment " essential. Moreover, foreign investors are required to comply with the "negative list for foreign investment." However, significant differences in the policies and regulations governing these two zones can also be observed. For instance, legislators in Shenzhen have emphasized "attracting foreign investment", while legislators in Shanghai have focused on "protecting foreign investment".