4 - Nondiscriminatory Standards in China’s BITs

Summary

In January 2014, the EU and China decided to launch negotiations on a bilateral treaty addressing the promotion and protection of investment between the two parties. This chapter examines the legal positions from which the parties will conduct their negotiations in terms of the nondiscriminatory standards, i.e., the national treatment and the most-favored-nation treatment, by focusing on the evolution of nondiscriminatory standards in China’s BITs against the same standards in the EU BITs, in particular the EU’s recently concluded three important treaties regulating, among other things, foreign investment, with Canada, Singapore and Vietnam. Domestically, the reference value of BITs signed by China in the 1980s and 1990s has been significantly affected by the dynamic economic reform and market development in the past four decades. Essentially, globalization has fundamentally lifted China’s foreign investment standards up to international standards. As a result, while the market anticipates difficulties in the ongoing negotiations, the gap between EU and China should be noticeably slight when the EU and China come to negotiate the nondiscriminatory standards.