China and International Investment Law

by

Yanzhi Wang

• LAST REVIEWED: 26 October 2023
• LAST MODIFIED: 26 October 2023
• DOI: 10.1093/obo/9780199796953-0250

Introduction

International investment law (IIL) is an attractive subfield within international economic law (IEL). China and Chinese investors are important actors in international investment law and process. With the rise of China, its influence on international investment law and governance is also growing. Since its reform and opening-up, China has been one of the most popular destinations for foreign direct investment (FDI), and since 2008, China has gradually become one of the largest overseas direct investment (ODI) countries. China is an active participant in the international investment regime and has concluded more than one hundred international investment agreements (IIAs), including more than ten free trade agreements (FTAs) with investment chapters. Chinese IIAs have experienced important shifts from the conservative IIAs providing limited investment protection, to the liberal IIAs providing high-level investment protection in the early 2000s, and then to the balanced IIAs protecting investment while safeguarding the regulatory rights of the host state. China has been respondent only in a few investor-state dispute settlement (ISDS) cases. China has also been participating in the ISDS reform process through its IIA practice and at the UN Commission on International Trade Law (UNCITRAL) forum. With the paradigm shift from the liberal IIAs to the balanced IIAs in IIL and the implementation of the Belt and Road Initiative (BRI), China has also been updating its old bilateral investment treaties (BITs) and participating in international investment governance reform. For example, China played the leadership role in the adoption of the G20 Guiding Principles for Global Investment Policymaking in 2016, and, more recently, the negotiations on the agreement on investment facilitation among World Trade Organization (WTO) members. At the domestic level, China has been constantly improving its FDI and ODI laws and system. For example, China adopted the negative list model for foreign investment admission in 2013, and formulated the new and united Foreign Investment Law. In recent years, Chinese investors have been actively participating in international investment arbitration. In international investment law and practice, China has faced many unique or special legal issues nationally and internationally, such as national security screening, transnational investment subsidy, state-owned enterprises’ overseas investment, the applicability of Chinese BITs to Hong Kong SAR and Macao SAR, restrictive arbitral jurisdiction provisions in old Chinese BITs, the role of labor provisions and sustainable development provisions in IIAs, the impact of the China-US trade war on IIL, compulsory technology transfer, the state capitalism debate, the BRI investment dispute settlement mechanism innovation, and the impact of the BRI and even the Chinese Model on the global economic legal order. China’s international investment law and practice and its role in the global economic order have attracted many legal scholars and practitioners both from China and from other countries. Since the 2010s, the study of the interaction between China and IIL has grown rapidly, and much academic literature on this subject has been produced.

Textbooks

There are many IIL textbooks in the Chinese language. The principal contemporary textbooks are 余劲松 2022, 余劲松 2018, and 陈安 2020. Earlier works are 姚梅镇 1985 and 曾华群 1999. All of these cover detailed host state law and home law on international investment, along with the International Centre for Settlement of Investment Disputes (ICSID) Convention and the Multilateral Investment Guarantee Agency (MIGA) Convention, and obviously reflect the South-North Contradiction perspective, the developing countries’ position, and the Chinese perspective. Most Chinese IIL textbooks have relatively little international investment agreement and arbitration coverage. However, 韩立余 2018 includes detailed international investment agreements and arbitral cases.

• 姚梅镇. 国际投资法. 武汉: 武汉大学出版社, 1985.

  This textbook is the first Chinese IIL textbook. It establishes the basic framework of an IIL textbook with Chinese characteristics, which includes detailed coverage of domestic laws on international investment, the ICSID Convention, and the MIGA Convention. It pays more attention to China’s foreign investment law, and emphasizes the perspective of South-North Contradiction and the opinions of developing countries on international minimum standards, diplomatic protection, state contract, and nationalization and compensation.

• 陈安主编. 国际经济法学新论. 第五版. 北京: 北京大学出版社, 2020.

  This textbook covers broad international economic law (IEL) topics. It includes six chapters, which cover the concept and sources of IIL, treatment standards for foreign investment, the legal system for controlling, protecting, and encouraging transnational investment, and the international investment dispute settlement mechanism.

• 曾华群主编. 国际投资法. 北京: 北京大学出版社, 1999.

  This textbook includes the concept and sources of IIL, legal issues in various international investment forms, laws regulating, protecting, and encouraging international investment, overseas investment insurance, MIGA, ICSID, international investment dispute settlement, etc.

• 韩立余主编. 国际投资法. 北京: 中国人民大学出版社, 2018.

  This textbook deals with the definitions of investment and investor, investment forms, investment admission, prohibition on performance requirements, treatment standards, expropriation and compensation, foreign exchange transfer and regulation, overseas investment insurance, international investment and sustainable development, international investment disputes settlement, etc. It contains many new developments in investment agreements and arbitration.

• 余劲松主编. 国际经济法学. 第二版. 北京: 高等教育出版社, 2018.

  This textbook is a commonly used IEL text in China and it covers broad IEL subjects. Chapters 9, 10, and 11 of this textbook deal with legal forms of international direct investment, domestic laws on international investment, and international law on foreign investment, including bilateral and regional investment agreements, the MIGA Convention, and the trade-related investment measures (TRIMs) agreement. Chapter 17 covers international investment dispute settlement, including the ICSID Convention.

• 余劲松. 国际投资法. 第六版. 北京: 法律出版社, 2022.

  This textbook is the most popular IIL textbook. This latest edition has added the contents of the new Chinese Foreign Investment Law (2019) and its Implementing Regulation (2019), and has incorporated the latest international investment treaty and arbitration materials.