Investment Arbitration and China: Investor or Host State?

Abstract:     
China`s international investment arbitration practices are currently not plentiful, but its domestic legal and BITs-concluding practices allow the use of international arbitration to resolve China-related international investment disputes to a varying degree at different times. For the disputes between the host government and foreign investors, China's early BITs often adhere to the principle of exhaustion of local remedies and foreign investors only can restrictedly use a third-party international arbitration, such as ICSID under the Convention on the Settlement of Investment Disputes between States and National of Other States; the later BITs broadly allow to use a third-party international arbitration. However, China should continue to maintain the early cautious BITs-concluding position and make a prudent use of the ICSID arbitration mechanism, taking partial acceptance as the principle and full acceptance case by case where appropriate as an exception. For the disputes between private investors, investors always agree to a third-party international commercial arbitration. China should actively improve the environment of domestic arbitration to attract investors to willingly choose China as the arbitration place and make a greater use of China's international commercial arbitration. Only by doing so, can the interests of all the investors be better protected and the healthy development of the national economy can be better promoted.

Number of Pages in PDF File: 20

Keywords: international investment arbitration, China's arbitration practices, ICSID international arbitration, international commercial arbitration

JEL Classification: F21

Accepted Paper Series