Rising China and Global Investment Governance: An Overview of Prospects and Challenges

Abstract

International investment is one of the fields of global governance that is likely to be affected by China’s rise as a global superpower in general, and its rise as a global investor in particular. It has become manifest by China’s leadership in forming of the G20 Guiding Principles for Global Investment Policymaking and in establishing the Asian Infrastructure Investment Bank, while signaling the country’s growing capacity to influence global investment governance. However, China’s aspiration to steer global investment governance is being hindered by the increased backlash against globalisation and the investment treaty regime, as well as the rapid growth of Chinese investments. At the same time that protectionist measures aimed at Chinese investments are on the rise, the Belt and Road Initiative is underway, which will increase Chinese desire to safeguard the interests of Chinese investors. Consequently, it is possible that a Beijing-based pole in global investment governance could emerge, just as reforms are underway to address the legitimacy crisis in the regime.