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.

The chapter discusses cybersecurity from the perspective of human rights protection. It first identifies adopting border measures as one approach to fulfilling a state’s duty to protect its citizens against human rights violations caused by cybercrimes. It then examines the tension between these FDI restrictive border measures and states’ investment protection and promotion obligations under IIAs. The analysis demonstrates a limitation in the current international law framework in which invoking the concept of national security remains the only means for states to address cyberthreats, which involves the risk of an accelerating shift to protectionism.

This chapter investigates whether China assumes the role of a rule-taker, acts as a rule-maker or even breaks with the system governing foreign investment. Given its significant foreign investment flows and economic and political clout, a better understanding of China’s ideas for and potential role in the ongoing reform of global investment governance is highly relevant. An analysis of China’s international investment agreements shows that China acted as a rule-taker by broadly accepting the templates of its treaty partners, while clinging to a number of defensive positions. The most recent and significant international investment agreement negotiated by China, the Comprehensive Agreement on Investment, signed in principle with the EU, seems to be following a template that largely reflects the preferences of the EU. China is also a supporter of the World Trade Organization negotiations on investment facilitation. China’s role in the Investment Facilitation for Development (IFD) Agreement negotiations should be characterized not so much as a thought-leader but as a key promoter of dialogue and negotiations.

The legal foundation of international investment regulation (IIR) is vast, complex and varied, across numerous substantive and procedural rules. It is laid down in close to 3,000 different international investment agreements. This network of investment treaties is complemented by two key arbitration treaties: the 1958 New York Convention for the enforcement of arbitral award, and the 1965 ICSID Convention, which provides a forum and procedural rules for investment treaty arbitration. This complex landscape thus legitimately begs the question: how have we come to this network of legal instruments, and what do they entail?

Having clarified how capital movements are regulated at the multilateral level and explained how the multilateral framework translates to the bilateral or regional levels through FTAs, we now turn to the third level of regulation made available in an international law context – international investment agreements (IIAs). IIAs are critical to capital movements and capital flows in that they create a specific legal framework with substantive provisions aimed at protecting and promoting cross-border investors and investment. Like the previous chapter, this chapter refers extensively to the four representative comprehensive treaties – CPTPP, USMCA, RCEP and CETA. Where applicable, reference is made to other agreements, and in particular agreements negotiated by developing countries. The main conclusion of the chapter is that modern IIAs contain a wide range of safeguards and limitations which effectively allow host governments to put CFMs into place in circumstances of financial instability and financial duress. Moreover, the chapter also details how arbitral tribunals have narrowly interpreted state obligations and given substantial deference to host states when applying exceptions. That being said, treaties are drafted differently and the language, terms and choices made in drafting a treaty can significantly affect obligations and outcomes.

The analysis in the substantive chapters of the book have led to the following six observations and concluding remarks: (1) the IMF has regulatory authority over capital controls; (2) The WTO is not an impediment to the implementation of CFMs; (3) modern FTAs and IIAs are not an impediment to the implementation of CFMs; (4) Investment Tribunals and WTO Dispute Settlement Panels have interpreted the prudential exception broadly, fairly and reasonably; (5) a CFM taken in accordance with IMF recommendations or guidance is unlikely to conflict with modern trade and investment agreements; and (6) there is a potential convergence between WTO and international investment law. A recurring theme is that the risk of IEL instruments constraining governments has been overstated. The main risk lies not so much in IEL agreements per se but in those agreements that do not incorporate modern drafting techniques which limit or condition State obligations or provide for a wide range of safeguards to ensure that legitimate CFMs do not run afoul of treaty obligations.

This chapter sets the background of this study by discussing the development of the international investment agreements (IIAs) regime as a system to protect foreign investors, many of whom are transnational corporations (TNCs), the impact of TNCs’ activities on the host states, and the increasing criticism of the ’one-sidedness’ of the IIA regime, particularly the lack of a mechanism to hold investors accountable for their conduct and the call for ISDS reform to address this asymmetry. It explains that, against this background, this study examines ways to materialise investors’ responsibility within the current IIA-based dispute settlement mechanisms (investment arbitration and the Investment Court System (ICS)). This chapter also explains this study’s focus on corporate environmental responsibility and its inseparable link to human rights protection, the structure of the book, and methodology of this study.

This chapter assesses international law-based possibilities to hold corporations accountable for their human rights impacts.The negotiations by the UN Human Rights Council on a binding international treaty on BHR is the most significant development in this regard. This chapter takes a detailed look at the idea and prospect of such a binding legal framework. Before doing so, some other potential accountability mechanisms in the realm of international law are assessed – namely, international investment law and international arbitration. The chapter takes a thorough look at international investment agreements and bilateral investment treaties and how these instruments could be improved to account for human rights. It also explores arbitration as an instrument to deal with BHR disputes. Finally, it briefly touches on the idea of a world court of human rights.

The international community realizes the possible benefits and contributions of mediation as a means of settling international investment disputes, most notably, its unique trait to deal with sensitive claims relating to national regulatory authority.Discussions to introduce and facilitate mediation in addition to or in lieu of present ISDS proceedings are taking place in various fora at the moment including UNCITRAL and ICSID.These discussions are not intended to replace the ISDS regime with a non-binding mechanism. Rather, the purpose is to supplement the existing system with the addition of a new avenue, where the disputing parties can pursue an amicable resolution. The focal point in the current discussions is how to introduce mediation into international investment agreements in a more structured and systematized manner.Various experiments are being undertaken at the moment.Traditionally, Asian countries have been regarded as being more receptive of the harmonious resolution of disputes and less litigious in settling disputes. This traditional legal culture stands in line with the recent focus on mediation as a means of settling international disputes and, in particular, international investment disputes. Mediation is one of the ISDS reform subjects where Asian countries can contribute their experience and legal culture.

This chapter introduces the book and situates it in current debates on both expropriation in international investment law and (international) legal theory.

In Chapter 8, Brenda Gunn looks to Canada as an example when she provides an analysis of how states have obligations to ensure the protection and promotion of Indigenous peoples’ rights in international investment agreements. Professor Gunn’s chapter begins by discussing some of the rights of Indigenous peoples that are potentially threatened by investment agreements, with a focus on land rights and the right to participate in decision-making on the basis of free, prior and informed consent. She concludes with a discussion of what measures need to be taken in investment agreements to ensure that Indigenous peoples’ rights are properly protected during the negotiation and implementation of investment agreements. This includes reference to the obligations of states and business enterprises to ensure that investment agreements protect Indigenous peoples’ rights while at the same time promoting foreign direct investment.