21 - China

Summary

For the past forty years China has been developing its network of international investment agreements. While initially China followed the template set by contracting partner countries, it has increasingly adopted its own approach towards investment protection in treaty negotiations, in an attempt to translate its rapid economic growth into greater political and negotiating power. This aspiration is also visible in China’s domestic policy initiatives concerning inward investment, in particular its enactment of the Foreign Investment Law and its implementation of related measures, including exemptions from tax liability for certain reinvestments. China’s continued shaping of investment treaties in accordance with its own bespoke needs has the potential to influence the future development of international investment law worldwide. This chapter first summarizes the history of China’s investment treaty practice and its domestic policies concerning inward investment. It then looks at issues that have arisen in investment treaty arbitrations involving China (as a respondent) or its nationals (as claimants). Finally, it analyzes China’s proposals for international investment law reform.