Investor-State Arbitration in China: A Comparative Perspective

Abstract

Notwithstanding China’s endorsement of investor-state arbitration (ISA) more than a decade ago, few investor claims have been initiated against it. These concerns are not peculiar to China. Economically and politically powerful states, not least of all the United States, are less frequently subject to ISA than poorer states for much the same reason. What is increasingly likely is that, China is preparing itself and its investors abroad for investor-state proceedings in the future. This is evident, for example, in China’s growing interest in the functioning of the International Center for the Settlement of Investment Disputes (ICSID), among other institutions, in its inclusion of ISA in its Model Bilateral Investment Agreement and in various regional and bilateral agreements it has concluded. China is now one of the biggest recipients of foreign investment in the world, as well as being a key player in outward foreign direct investment. In light of China’s rise in the foreign investment sphere and the consequence this may have on its engagement with investment claims, this Chapter has two primary purposes. The first purpose is to examine China’s limited experience with ISA under bilateral investment treaties (BITs). The second purpose is to identify how China is likely to develop its investor-state dispute resolution regime through strategic investment alliances with other states without sacrificing its distinctive national interests including those of its investors abroad.