No abstract

Abstract. International investment law scholars do not provide sufficient analysis of underlying process of investment (capital flows). As China has become the second biggest economy in the world and the third biggest investor in the world that channels outward investments mainly through state owned enterprises the question about the underlying reasons of such investments remain. To address this issue the author reviews the historic periods of capital flows and current trends; examines the theoretical framework of and reasons for foreign investment from state as well private (as against state agent) investor's perspective and assesses the underlying reasons of China's capital export policies.

There are various notions of capital, but in this article movement of capital is being analysed from the perspective of international investment law-a country has an asset, which it cannot exploit or do so efficiently and there is a foreigner who possesses financing, technology or know-how, which allows to develop such asset. Lithuania is a net importer of capital, thus this article analyses on what might be the asset that Lithuanian government is interested in developing through foreign investment and why Lithuania does not develop such asset through other means, i.e. borrowing. As China is one the biggest capital exporters and becomes one of the biggest outward investors, this article also analyses driving factors behind such increase of outward investment from China-the Going Out policy and various instruments used by China to encourage such policy. Finally, the article analyses the possible underlying reasons Chinese company CAMCE has in Kaunas free economic zone and what such interest means under international investment law.

No abstract