10 - Who Makes Chinese BITs? An Empirical Investigation

Summary

Very little empirical research has been conducted in relation to China’s BIT law and practice. This chapter makes a novel attempt to comprehend China’s BIT-making by applying an empirical (or quantitative) approach. Existing literature has tried to rationalize Chinese BITs’ generational evolution by attributing this to China’s policy shift, transitioning from using BITs to attract foreign investment to using BITs to protect its outbound investment. Because of this policy shift, Chinese BITs are being reframed or remodeled, moving from a conservative and protectionist approach with the stress on sovereignty in regulating foreign investment to a liberal approach with more focus on foreign investors’ protection. Although the Chinese government has never made it clear to the outside world why and how its BITs have changed, the general wisdom attributes this change to the government’s self-determined policy move. Through its empirical study, the chapter looks for correlation between Chinese BITs and a variety of factors shaping a host state’s BIT policy. The finding seems to suggest that China’s BIT policy change is due to some outside pressures as well as certain endogenous factors.