Hesitant Embrace: China's Recent Approach to International Investment Rule-Making

Abstract

China is becoming one of the key stakeholders in the international investment regime. It is the third largest source country for outward foreign investments and concluded nearly 140 investment treaties. Despite these impressive numbers, it is still unclear what role China can play – and in fact wants to play – in the ongoing reform of the international investment regime. Starting from this overall focus, this article analyses the most recent period of China’s international investment policy-making. Mapping the contents of investment treaties signed since 2008 it argues that China undertook a ‘partial NAFTA-ization’: Whilst China has adopted a number of clauses invented by the member states of the North American Free Trade Agreement, it introduced these clauses in an incoherent fashion. Looking at the drivers of this peculiar policy, this article argues that China’s practice of investment treaty-making is largely inspired by its partner countries, which helps us to understand the incoherent contents of its post-2008 treaties. Against this background, it is difficult to argue that there is a unified Chinese approach to international investment rule-making. This belies the argument that China can make a significant contribution to reforming the international investment regime.

Keywords: China, international investment agreements, foreign direct investments