The doctrine and case law on expropriation in international investment law is an unsettled area due to a variety of factors such as the diversity of interests between capital importing and exporting states, the divergence in legal, economic, and cultural concepts of property rights, and, more importantly, the regulatory role of the state in cross-border investment activities. Although China has been an active ‘treaty-maker’ in the universe of international investment arbitration, evidenced by its nearly 130 bilateral investment treaties (BITs), the notion of expropriation in these BITs is in a state of flux. This article scrutinizes the expropriation clauses in China's BITs, in particular, the Peru–China BIT and the Peru–China free trade agreement, by reference to the final award of Tza Yap Shum v. The Republic of Peru, the first Chinese BIT arbitration case. This article attempts, in a comparative context, to understand the underlying rationale for China's evolving stance on expropriation.
