1 Doctor and Associate Professor of International Law, Xiamen University School of Law, People's Republic of China; Executive Editor of Journal of International Economic Law (in Chinese). The author may be contacted at: ‹firstname.lastname@example.org› or ‹email@example.com›.
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01 Jan 2006
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1 See United Nations Conference on Trade and Development (UNCTAD), WorldInvestmentReport:TIleShiftTowardsServices, 2004, p. 1925.
2 See Xiang l3enwu, 7lieEmyiricalStudiesouDeterminantsandEffectsof China'sDirectInvestmentAbroad, Social Sciences Academic Press (China), 2005, pp. 61-62, 67; Xong Xiaoqi, OverseasDirectlnvestmentRisksPrevention, Economics Sciences Press, 2004, p. 196. 3 Ministry of Commerce (China) (Moc:), StatisticsCommiiniquiof2004ChineseOutwardForeignDirectInvestment(lIon:finalldalsector),p. 1; available at: .http://www.fdi.gov.cn/common/infojsp?id=Al3COOUOOUOU000026189.. last visited 10 June 2006. ; MoC, ChineseOutwardForeignDirectInvestmentStatistics2005; available at: <http://www.fdi.gov.cn/ common/tnfo.jsp?td=ABC000000000000287t3<, last visited 10 Junc 2006. 5 Moc, supra note 3, p. 1. e General Office of Moc, NoticeontheEstablishmentofData-CheckingSystemtowardChineseOutwardForeignDirectInvestmentto DijfermtCountriesandAreas; available at: <http://www.mofcom.gov.cn/aarticle/b/bf/200606/ 20060602436126.html�, last visited 10 June 2006. 7 Moc, supra note 3, pp. 2 and 3.
x Sec UNCTAD, ProspectsforForeignDirectInvestmentandtheStrategiesoJTransnatinnalCorporations(2004-2007), United Nations, 2004, p. 15. 1 See Zhou Bin and Zhang Zhaoyi, Chinahasbewmethe fourthbiggestFD/source; available at: http://22.214.171.124 I/ subjcct3/main.asp?id=7&P=2>, last visited 10 May 2006. r° 48.4 per cent of the businesses investigated expressed the intention to invest abroad in two years, and 70 per cent of the total businesses investigated will invest abroad in four years. 20 per cent of the businesses investigated predicted that their total amount of overseas investment will be more than US$ 10 million. See EditingNote,Suneryof theTrendsandIntentionsof ChineseEnterprises'InvestmentAbroad, International Economic Cooperation, No. 3, 2005, p. 7. ' rr Xiang Bcnwu, supra note 2, pp. 68-69. tz Moc, supra note 4. r 5 Moc:, Dietop20destinationsof cumulativeChinese0�1uptotheyear2003; available at: �http://www.chiiiafdi.gov.cn/ chinese/article_view.asp?id=930>, last visited 1 October 2005. 14 Moc, supra note 3, p. 9.
l� Cf. Yao Wang and Cai Xiaojun, Summaryof Stl/dyof"GoingAbroad"StrategyinChina, Economy and Management Studies, No. 10, 2005, p. 20. 16 According to Moc, this Catalogue is open to change; see at: .http://www.mofêom.gov.cn/aarticle/a/200407 1 20040700250926.htrtil,, last visited 1 June 2006. 17 23 countries are from Asia, including: Thailand; Singapore; the Lao People's Democratic Republic; Myanmar; Viet Nam; Cambodia; the Philippines; the United Arab Emirates; Malaysia; Indonesia; Brunei Darussalam; India; Pakistan; Bangladesh; Afghanistan; East Timor; the Democratic People's Republic of Korea (Dn2x); Mongolia; Japan; South Korea; Iran; Saudi Arabia; and Turkey. 18 13 countries are from Africa, including: Egypt; Sudan; Algeria; Mauritius; Mali; Nigeria; Kenya: Tanzania; Zambia; Mozambique; Namibia; Madagascar; and South Africa. 'v 11 countries are from the Americas, including: Canada; the United States of America; Mexico; Cuba; Argentina; (:hile; Trinidad and Tobago; Brazil; Venezuela; Jamaica; and Suriname. =° Five countries are from Oceania, including: Australia; New Zealand; Papua New Guinca; Fiji; and Vanuatu. 21 15 countries arc from Europe, including: Sweden; France; the United Kingdom; Iceland; Germany; the Netherlands; Poland; the Czech Republic; Hungary; Romania; Russia; Kyrgyzstan; Kazakhstan; Uzbekistan; and Azerbaijan. -= There are 56 developing countries, including transitional States. 23 See Ministry of Foreign Affairs (China) (MFA), China'sAfricanPolicyPaper (January 2006), Part IV; available at: <http://www.fbcac.org/chn/zt/zgdfzzcwj/t230478.htm', last visited 10 June 2006. Also see Lii Guozen (Assistant Minister of MFA), Sino-Africahasgreatpotentialinthefieldo(mutualinvestment; available at: <http://www.focac.org/chn/zt/zgdfzzcwj/t231145.htm>, last visited 10 June 2006. 24 Li Changjiu and others, WhatrisksdoChineseEnterprises facewhileinvestingabroad, global Times, 21 June 2006, at 11.
25 Xiang Benwu, supra note 2, p. 75. 26 Moc:, supra note 3, p. 7. 27 See: <http://www.fdi.gov.cn/common/info.jsp?id=ABCOOOOOOOOOOO()287t3). zs See, for example, State-owned Assets Supervision and Administration of the State Council (SASAC), EnhancetoImploreOverseasNaturalResource — ReportofOutwarrlInvestmentbyCentralEnterprises, Macroeconomics Study, No. 8, 2004. z9 UNCTAD, supra note 1, pp. 25, 27. 3o See Moc, Reportof TrendsqfforeigiiTrade(Spring2005); available at: ,http://news.xinhuanet.comlfortune/ 2005-04/29/coiiteiit 2893977.htm>, last visited 10 March 2006.
31 It now is SASAC. 32 It can be inferred that, for a long time, Chinese OFDI had been mainly conducted by trading corporations. See Xong Xiaoqi, supra note 2, p.198. ;3 As Zeng Peiyan, Vice Premier of the State Council, said, in 2004 China's imports and exports totaled US$ 1.15 trillion, ranking 3rd among all nations in the world, and it attracted US$ 60.6 million in foreign investment, the second-highest amount worldwide, bringing the aggregate value of inward foreign investment to over US$ 560 billion. In 2004, China's gross domestic product amounted to US$ 1.65 trillion, see: <http://wss.mofcom.gov.cn/aartic)c/a/c/200602/2006020t 595781.htmh, last visited 10 June 2006.
34 The Central Committee of the Cpc, DecisiononSomeIssuesconcerningtheImprovementof theSocialEconomyMarket; available at: <http://news.xinhuanet.com/newscenter/2()()3-l()/21/content_H35402.htn]', last visited 10 June 2006. 35 Yao Wang and Cai Xiaojun, supra note 15, p. 21. 36 See the State Council, Decisionof theStateCouncilonReformingtheInvestmentSystem, Parts u and in; available at: ,http://news.xinhuanet.coll1/zhengfu/2004-07 /26/content_1648074.htm', last visited 10 June 2006. '� Ibid., Annex, Part XIII. 31 In regard to the more detailed examination and approval procedure by Nuac, see NDRC, InterimRegulationonExaminationandApprovalofInvestmentItemsAbroad(911012004); available at: <http://www.sdpc.gov.cn/ zcfb/zcfbl/zcfbl2004/t2OO5lOlO 44801.htm�, last visited 25 June 2006. j9 Moc, ProvisionsontheExaminationandApprovalofInvestmenttoRunEnterpriseAbroad; available at: (http://www.mofcom.gov.cii/aarticle/b/bf/200410/20041000288020.litiiil>, last visited 20 June 2006.
40 Ibid., Article 4. i� Ministry of Foreign Trade and Economic Cooperation, InterimRulesoilForeignTradeBarrierInvestigation; available at: ,http://news.xinhuanet.com/zhengfuI2002-09/29/contcnt_580381.htl1l'' last visited 10 Junc 2006. On 21 January 2005, Moc issued Foreign Trade Barrier Investigation Rules replacing the Interim Rules. 12 Moc, ObstacleReportRulesoiltheInvestrnentto DifferentCountrie.c; available at: <http://fec2.mofcom.gov.cn/ aarticle/laws/200411/20041101240396.htnib, last visited 2 June 2006. 41 Ibid., Articles 2, 11 and 12. 44 may and MFA, IndustrialGuidanceCataloguecfInvestmenttoForeignCountries; available at: ,http://fec2.iiiofcom.gov.cn/ aarticle/)aws/200408/20040801240263.html', last visited 24 June 2006. ^5 With a sharp comparison, since 1995 the Chinese government has issued three versions of the Industrial Guidance Catalogue of Investment for inward investors. 46 Moc, CircularofCountryCatalogueofGuidingInvestmentinProcessingTradeofTextileClothirrginLatinAmerica; available at: <http://www.mofcom.gov.cn/aarticle/b/bf/200404/20040400215654.html), last visited 2 June 2006. 47 Moc, CircularofCountryCatalogueofGuidingInvestmentsinProcessingTradeofTextileClothinginAsia; available at: .http://www.mofcom.gov.cn/aarticle/b/bf/200404/20040400215654.htmh, last visited 2 June 2006. 4" Moo, Circularof CountryCatalogue4 GuidingInvestmentinProcessing1'radeof TextileClothinginSoutheast-Africa; available at: http://www.iiiofcoiii.gov.cn/aarticle/b/bf/200403/2004030019102-�.htn-�,, last visited 2 June 2006. a9 In 2005, the total amount of M&A by Chinese enterprises reached US$ 6.2 billion; the amount in 2004 and 2000 was US$ 4.8 billion and US$ 1.8 billion, respectively. Liu Ji, a famous economist, predicted that China would play the leading role in the current "Fifth Wave "of global M&A. See EditingBoard,topYenOverseasInvestments, Chinese Investment, No. 1, 2006, p. 91. 50 Moc and SAFE, NoticeaboutReportingSystem fortheOverseasMergerandAcquisitionRelatedMattersof Enterprises; available at: http://www.mofcom.gov.cn/aarticle/b/bf/200505/20050500087223.litriil>, last visited 2 June 2006.
� The State Council, Regulation onSuspending ofCross-borderMergerandAcquisitionandStrengtheningofAdministrationof OutwardInvestment, 1994. 5'- Moc and SAFE, supra note 50, Preamble. 5' MoF and Moc, CircularonIssueConrernirrgEarlyStageFeeSupportonForeignInvestmentandForeignEconomicCooperationProjectintheNaturalResourceItemsin2004; available at: http://www.iiiofcom.gov.cn/aarticle/b/bf/ 20U41O/20041000295100.htl1Ù" last visited 25 June 2006. According to Article 8(4) of the Circular, a single investment item can be supported with the amount of no more than 4 million Yuan, about US$ 500,000. � MoF and Moc, RegulationonSpecialFundforForeignEconnrnicandTechnicalCooperation; available at: <http://www.mofcom.gov.cn/aarticle/b/br7200605/20060502256191.html', last visited 25 June 2006. 'S Joseph Battat, China'.,OutwardForeignDirectInvestment:FtASlMicnFirmSurvey, p. 16; available at: <http://rru.worldbank.org/Documents/PSDForum/2006/joe_battat.pd6, last visited 25 June 2006. 5ó NDRC and China Eximbank, NoticeonGivingCreditSupporttotheKeyOverseasInvestmentProjectsEncouragedbytheState; available at: http://www.ecnii-kjy.com/news/showiiews.asp?newsid=547,, last visited 25 June 2006. 57 Notzc and CDB. Noticeof NationalDevelopmentandReformCommissionandChinaDevelopmentBankabouttheRelevantIssuesonProvidingMoreFinancittqSupporttoKeyOverseas-investedProjects; available at: �http://www.fdi.gov.cn/ ltlaw/lawmfOFDIsp.jsp?id=ABCOOOO()000000012479&appId=h, last visited 25 June 2006.
58 SAFE, CircularoftheStateAdministrationofForeignExchangeonAdjustingtheManagementModeofOverseasFinancialfiuarantees as�ProvidedbyBankswithin ChineseTerritoryforOverseasInvestmentEnterprises; available at: <http://www.mofcom.gov.cn/aartic)e/b/bf/200508/20050800278653.htni[), last visited 10 June 2006. 5`' SAFE, CirarlaronEnhancingtheReformPilotsregardingtheAdministrationofForeignExchangeforOverseasInvestment; available at: <http://www.safe.gov.cn/mode)_safe/)aws/)aYV_detai).jsp?]d='4&[D=80404000000000000, ]., >, last visited 10 June 2006. h� Li Dongrong, SupportChineseenterprises`Goingabroad',Promoteinwardandoutwardcapital,flow; available at: ,http://www. safe. gov. cii/model safe/iiews/new detailjsp?ID=90000000000000000,501&id�3&typc=4,, last visited 10 June 2006. 61 SAFE, NoticeoftheStateAdministrationofForeignExchanqeonAdjustiraqSomeForeignExchangeManagementPoliciesconcerningOverseesInvestments; available at: <http://www.safe.gov.cn/model safe/laws/ law_dctail.jsp?ID=80404000000000000,23&id=4>, last visited 10 June 2006. 62 It was reported that the main reason was that the insurance rates were too high to be acceptable to the insured; see: <http://news2.jrj.com.cn/news/20050607/000000029)65.htm'. last visited 10 September 2005. 1,1 NDRC and SINOSURE, NoticeContentingRelevantIssuesonSettingupaRiskPreventionMechanism forKeyOverseasInvestmentProjects; available at: .http://www.jxdpc.gov.cn/cyzc/cytzcz/lywzI/20050822/160508.htm.. last visited 10 May 2006. 64 Ibid., Article 7. 65 In 2005, SrNOSUkF handled 9 investment insurance cases, including 7 newly written ones and 2 renewed covers. The amount insured was US$ 520 million, up 333.4 per cent from the year 2004. By the end of 2005, the outstanding liability with investment insurance was US$ 660 million. See SrNOSUtZF, AnnualReport2005, p. 26. In 2006, SINOSUR.E has issued several polices; see: �http://126.96.36.199 /news,, last visited 1 June 2006.
(l(t Moc, ImploringInternationalMarketthroughincreasingExportTradeisnotEiicoiiraged; available at: <htt:p://ncws.x)nhuanet.com/fbrtune/2005-()4/29/con):ent_2893977.htm\ last visited 15 June 2006. "7 For example, China is increasingly intensifying co-operation with MIGA to support Chinese enterprises to operate internationally; see Angela Gentile and Philippe Valahu, Mtt;.4inChina:PoliticalRiskInsuranceHelpsInvestorsPushProjectsAhead; available at: <http://www.chinabusincssreview.com/public/0403/miga.html>, last visited 10 June 2006. 68 Jeswald W. Salacusc and Nicholas P. Sullivan, L7oBiisReallyWork?:AnEvaluationof Bilateral InvestmentTreatiesandTheirGrandBar,qain, Harvard International Law Joumal, Vol. 46, No. 1, 2006, p. 76.
"`' See, in detail, Andrew T. Guzman, WhyLDCSSign1'rentiesthatHurtl7mrn:ExplainingthePopularityofBilateralInvestmentTreaties, Virginia Journal of Intemational Law, Vol. 39, 1997. See also M. Sornarajah, TheIntemntioualLawonForeignInvestment, Cambridge University Press, 1996, pp. 258-259. 70 G.A. Res. 3201, U.N. GA01�,, 6th Special Session, Supp. No. 1, at 3, U.N. Doc. A/9559 (1974), reprinted in 13 I.L.M. 715 (1974). "GuidelinesontheTreatmentof ForeignDirectInvestment, reprinted in ICSID Rev.-F.1.L.J., Vol. 7, No. 2, 1992. 72 Ibid., Guidelines IV and v.
73 For the positive opinions, see, for example, Salacuse and Sullivan, supra note 68, pp. 95-110. For the negative opinions, see, for example, Kenneth J. Vandevelde, InvestmentLiberatinnandEconomicDevelopment:TheRoleof Bilateral Investment'1'rratirs, Columbia Journal of Transnational Law, Vol. 36, 1998, p. 524. The World Bank also casts doubt upon the function of BtTS; see World Bank, WorldDevelopmentReport2005-ABetterInvestmentClimate forEvrryoue, World Bank and Oxford University Press, 2004, p. 177. �a Though he negates that there is a causal relationship between BITS and capital inflow, Vandevelde admits that BITS are helpful to reduce investment risks by stabilizing the legal framework within which the investment will operate, and this is also the major benefit for developing countries to conclude BITS; Vandevelde, supra note 73, pp. 525, 523. �5 According to Roberto Danino, former Secretary-General of IcsD, up to late in the year 2005, more than 1,500 BITS stipulated Icsii) clauses. See Roberto Danino, OpeningRemarkspresentedatdreSyrnposiumon"MakingtheMostof InternationalInvestmentAgreements:ACommonAgenda co-organized by ICSID, OECn and UNCTAD, 25 December 2005, Paris. �h Take Argentina, for example. Since the 1990s, Argentina has completely accepted ICSID jurisdiction in over 20 Bn s. 77 In this regard, the Maffezini case is classic; see EmilioAgustinMaffeziniv.KingdomofSpain, ICSID Case No. AW /97/7, Decision on Objections to Jurisdiction of 25 January 2000. As to the development of MFtv in arbitral jurisdiction in the IcsD system, see Locknie Hsu, MFnrandDisputeSettlenrent-WhentheTuaitiMeet, 7J.W.I.T. 1, February 2006, pp. 29-33. �" In this regard, see Carlos E. Alfaro and Pedro M. Lorcnti, TheGrowingOppositionof ArgentinatwoArbitrationTrib,mals-ACOIlflictbetweenInternationalandDomesticLaw? 6J.W.I.T. 3, June 2005, p. 417. 79 As to the Calvo Doctrine, see generally Manuel R. Garcia-Mora, TheCalvoClausesinLatinAmericanConstitutionalLawandInternationalLaw, Marquette Law Review, Vol. 33, 1994. As to the Calvo Doctrine and ICSID, see James C. Baker and Lois J. Yoder, IcstvandCalvoDoctrine:AHindranceto Fore(R"DirectInvestmenttoLDM, Ohio State Journal on Dispute Resolution, Vol. 5, 1989.
'0 Vandevelde, supra note 73, p. 525. 11 Karl P. Sauvant, NewSourcesof Fm:TheBRics-OutwardFDifromBrazil,Russia,IndiaandChina, 6J.W.I.T. 5, October 2005, p. 642. R2 Ibid., p. 639. 13 This is well exemplified by the fact that international investment arbitrations have increased dramatically since the 1990s and most of the defendants are developing countries. See UNCTAD, Issue,RelatedtoInternationalArrangements:Investor-StateDisputeandPolicyImplications, TD/B/Cot�t.2/62, 14 January 2005.
84 Country Risk is divided into four grades-A, B, C, and D-from low to high, and every grade is furthers divided into two sub-grades from low to high, for example, Grade A is divided into A1 and A2. K5 SINOSURE, TheListof CountryRisk, (unpublished), 2005. It It should be added that these 67 countries are not totally included in SINOSURE's Listof CountryRisk, ibid. Therefore, if we take account of this fact, the ratio becomes higher. � SASAC, supra note 28. Also see UNCTAD, China:AnEmergingFmOutwardlnvestvr, p. 7; available at: <http://www.unctad.org/sections/dite fditat/docs/China_ebrief_en.pdf, last visited 1 May 2005. H" It is the vitality of natural resources that prompted developing countries to spare no effort to push forward the approval of The Declaration on Permanent Sovereignty Over Natural Resources at the 1962 U.N. General Assembly, G.A. Res.l803(xvn), U.N. GAOR, 17th Session, reprinted in 2 I.L.M. 233 (1963).
H9 In the Nell' Path J'''China'sPeacefulRiseandtheFutureof Asia, presented at the Bo'ao Forum for Asia 2003, Professor Zheng Bijiang first proposed the "Peaceful Rise" strategy. See Zheng Bijian, PeacefulRise — China'sNewRoadtoDevelopment, Central Party School Publishing House, 2005, pp. 9-20. Zheng's proposal was immediately accepted by the Chinese government. In a speech in December 2003 at Harvard University, Wen Jiabo, Premier of the State Council of the People's Republic ofChina, expressed officially China's determination to rise peacefully; see Wen Jiabo, 1'urninRYourEyestoChina; available at: <http://wwT.v.china-un.org/eng/xw/t56090.htm'. last visited 1 September 2005. 9� In fact, in order to mediate some countries' concerns, the phrase "I'caceful Rise", adopted initially in 2003, has been recently replaced with "Peaceful Development"; see The State Council Information Office of the People's Republic of China, MtitePaperonPeacefidDeveloyrnentRoadojChina(12/22/2005); available at: �http://www.china.org.cn/chinese/zhuanti/book/1069230.htm>, last visited 1 June 2006. For the authoritative descriptions of China' strategy of "Peaceful Rise", see Zheng Bijian, supra note 89. '�r In this regard, it is well known that it is strong pressure from the U.S Congress that made the attempt of China's National Offshore Oil Corporation (CNOOC) to purchase Unocal Corporation, a U.S. Energy company, eventually fail. See Ben White, ChineseDropBidToBuyL7.S.OilFilm; available at: <http://www.washingtonpost.com/wp-dyn/content/articIe/2005/08/02/AR2005080200404.html', last visited 10 September 2005. 02 For example, the Chinese government, in PositionPaperof thePeople'sRepublicoJChinaontheUnitedNationsReforms, issued on 7 June 2005, points out that the reform should be conducive to enhancing the authority and efficiency of the Council and strengthening its capacity to deal with global threats and challenges. Increasing the representation of developing countries should be given priority. Developing countries, who account for more than two-thirds of the UN membership, are seriously under-represented on the Security Council. This situation must be reversed. More countries, the small and medium-sized ones in particular, should be given more opportunities to enter the Council on a rotating basis to participate in its decision making process. See: `http://www.fmprc.gov.cn/eng/zxxx/t199318.htm>, last visited 1 June 2006.
93 Shang Ming, ReviewandArtalysisonChina'sForeignCommerceandtheRelatedRegalPracticein2005, Journal of International Law (in Chinese), Vol. 12, No. 4, 2U05, p. 7. `" UNCTAD, RecentDevelopmentsinInternationalInvestmentAgreements, UNC'rnD/WaB/ITE/ItT/2005/1, 30 August 2005. °5 For the latest developments in these negotiations, see: �http://www.fmprc.gov.cn/chn/wjdt/1179/ tl62188.htm'. last visited 1 June 2006. 11 For the latest developments in these negotiations, see: <http://tfs.mofcom.gov.cn/aarticle/bc/200605/ 20060502140873.htiiil,, last visited 1 June 2006. `" For the latest developments in these negotiations, see: <http://www.chinaembassycanada.org/chn/xwdt/ t180745.htm>,last visited 1 June 2006. 98 Zcng Huaquan (ed.), International InvestmentLaw, Peking Press, 1999, pp. 432-435. yy China-Netherlands BIT, Article 3(3). t°° China-Gennany BIT, Article2(2). 101 See, for example, Protocol of the China-Germany BIT, Article 3. t°2 See, for example, China-Sweden BIT, Article 4. t°3 China-Germany 13IT, Article 6.
104 According to Article 5 of the Protocol of the China-Germany BIT, the transfer shall comply with the relevant 'formalities" stipulated by the present Chinese laws and regulations relating to exchange control. 105 See, for example, China-U.K. BIT, Article 7(1). ioc China-Barbados BIT, Article 9. 107 These 21 countries as the other parties to Sino-foreign BITS include: Finland; Congo; Botswana; Cyprus; Sierra Leone; Mozambique; Kenya; the Netherlands; Myanmar; Bosnia and Herzegovina; Trinidad and Tobago: Jordan; Cote d'lvoire; Guyana; Germany; Benin; Latvia; Uganda; Djibouti; Tunisia; and the DeltK. Of course, not all Sino-foreign BITS concluded after 1998 completely accepted ICSID arbitral jurisdiction. As a matter of fact, from 1998, the year that the China-Barbados BIT was concluded, up until 10 June 2006, 8 of the 26 newly concluded Sino-foreign BITS did not accept IcsiD arbitral jurisdiction, and the China-Benin BIT just partly accepted IcstD arbitral jurisdiction. See Wei Yanru, OntheImproprietyo_fChina'sRecentCompleteAcceptanceofICSIDjurisdiction, Journal of International Economic Law (in Chinese),Vol. 13, No. 1, 2006, p. 111. 108 Shang Ming, supra note 93, pp. 7-8.
109 Salacuse and Sullivan, stipra note 68 , pp. 8(>-81. "° China-Barbados BIT, Article 11. 111 China-Germany BIT (2003), Article 11. "2 A few of the Sino-foreign BITS concluded earlier include such rules; see, for example, the China-Mongolia BIT, Article 10. 113 See, for example, China-Bosnia and Herzegovina BIT (2002), Article 10; China-Benin BIT (2002), Article 11; China-Guyana BIT (2004), Article 11; China-Latvia BIT (2004), Article 12; China-Ethiopia BIT (1998), Article 11; China-Dvt�tc BIT (2005), Article 11. "' Salacuse and Sullivan, supra note 68, p. 81. "5 China-Latvia 13IT, Article 14(3). 11(, China-Norway Bit, Article 9(4). 117 China-Finland Brf, Article 15(3).
III Zeng Huaquan (ed.), supra note 98, pp. 426, 436. 119 Ibid., pp. 432-435. 120 China-Bosnia and Herzegovina BIT, Article 3(1). t2t See, for example, China-Germany BIT (2003), Article 2(2). tz2 China-Finland BIT, Article 3(2). 123 See, for example, protocols of the China-Germany BIT, China-Finland BIT, China-Bosnia and Herzegovina BIT, but these "Freeze Clauses" are applied to China only. 124 See, for example, China-Cote d'lvoire BIT, Article 3(3); China-Guyana BIT, Article 3(2); China-Benin BIT, Article 3(1); China-Latvia BIT, Article 3(2). In this regard, the China-Bosnia and Herzegovina Brr is exceptional.
126 See, for example, Hsu, supra note 77, pp. 25-34. 127 Of course, compared with local remedies provided by the host country, international remedies provided by the ICSID mechanism are not necessarily more beneficial to foreign investors. However, foreign investors are provided with more choices to access justice. 128 See, for example, U.S.A.-Argentina BIT, Article 2(2)(b). 129 The main reason probably is that, since the international rule-making process was traditionally dominated by the Western world, China is always skeptical about the fairness and equity of international law, including in the field of investment. 1311 Zcng Huaquan (ed.), supra note 98, p. 440. '3' See, for example, China-Bosnia and Herzegovina BIT, Article 2(2); China-Guyana Brr, Article 2(2). '3z Zeng Huaquan (ed.), supra note 98, pp. 437-439, 444. r33 On the latest discussions, see, for example, Christoph Schreuer, FairandEquitableTreatmentinArbitralPractice, 6J.W.I.T. 3, June 2005, pp. 364-385. 134 Zhu Xiaojing, FairandEquitableTreatmentinNArTAArbitration, Journal of International Economic Law (in Chinese), Vol. 13, No. 3, 2006. r35 According to Article 1131 (2) of the NAFTA, Interpretations of the Free Trade Commission are binding upon the relevant arbitral tribunal.
°6 NAFTA Free Trade Commission, Notes of Interpretation of Certain Chapter 11 Provisions, 31 July 2001; available at: <http://www.dfait-macci.gc.ca/tna-nac/NAFTA-Intcrpr-cn.asp>, last visited 10 June 2006. � China-Yemen BIT, Article 3(1). 138 China-Cape Verde BIT, Article 3(2). 9 China-Finland 131T, Article 3. 140 Zeng Huaquan (ed.), supra note 98, p. 445. 141 See, for example, China-Germany BIT, Article 4(2). �a= See, for example, China-Yemen BIT, Article 4(1); China-Ukraine BIT, Article 4(1). 143 These intemational conventions especially include the relevant human rights conventions, such as the International Covenant on Civil and Political Rights (General Assembly resolution 2200A (xxi) of 16 December 1966). According to Article 14 of the Convention: "All persons shall be equal before the courts and tribunals and everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law."
141 RudolfDolzer and Margretc Stevens, Bilateral InvestmentTreaties, Martinus NijhoffPublishers, 1995, p. 106. �;e Zeng Huaquan (ed.), supra note 98, p. 453. 146 Ibid., pp. 454-455. 147 See, for example, China-Guyana BIT, Article 4(2). 149 See, for example, China-Thailand BIT, Article 5(1). ray See, for example, China-Qatar BiT, Article4(2). 'S° See, for example, China-Sweden BIT, Article 3(1). rsr Zeng Huaquan (ed.), supra note 98, p. 454. For recent such BITS, see, for example, China-Cote d'lvoire BIT, Article 4(2); China-Botswana BIT, Article 4(2); China-Ethiopia BIT, Article 4(2). 152 See, for example, China-Bcnin Bit, Article 4(2); China-Latvia BiT, Article 4(2); China-Guyana BIT, Article 4(2); China-Gennany BIT, Article 4(2).
1-11 See, for example, China-Benin BIT, Article 6(1); China-Cote d'lvoire BIT, Article 6(1). Is4 Zeng Huaquan (ed.), supra note 98, p. 461. �5s See, for example, China-Bosnia and Herzegovina BIT, Article 6(4); China-Yemen BIT, Article 6(3). tsb See, for example, China-Barbados BIT, Article 5; China-Guyana BIT, Article 5. 157 See, for example, China-Barbados BIT, Article 5; China-Ethiopia BIT, Article 5; China-Yemen BIT, Article 5. 151 See, for example, China-Guyana BIT, Article 5(1); China-DNttK BIT, Article 5; China-Cote d'lvoire BIT, Article 5(1). 159 See, for example, China-Bosnia and Herzegovina BIT, Article 5; China-Benin BIT, Article 5. In this regard, the China-U.K. BIT concluded in 1986 was exceptional. 161 Kenneth J. Vandevelde, tlttitedStatesInvestmentTreaties:PolicyandPractice, Law and Taxation Publishers, 1992, pp. 213-214. 162 Though different in expression, all relevant Sino-foreign BITS provide that the destructionorrequisition of foreign investors' property by the forces or authorities of the other Contracting Party, mhichwasnotcausedincombatactionor wasnotrequiredbythenecessityof thesituation, shall be compensable. See, for example, China-Cote d'lvoire BIT, Article 5(2); China-Finland BIT, Article 5(1). tcs See, for example, China-U.K. BIT, Article 4(2); China-Cote d' Ivoirc BiT, Article 5(2). tb^ China-Finland BIT, Article 5(2).
165 For instance, Article 6 of the Protocol of the China-Germany BIT stipulates: "With respect to investments in the People's Republic of China an investor of the Federal Republic of Germany may submit a dispute for arbitration under the following conditions only: (a) the investor has referred the issue to an administrative review procedure according to Chinese law, (b) the dispute still exists three months after he has brought the issue to the review procedure, and (c) in case the issue has been brought to a Chinese court, it can be withdrawn by the investor according to Chinese law." Similar content can also be found in the Protocol of the China-Finland BIT. 166 See, for example, Chen An, FourCreatSafeguardsinBilateralInvestmentAgreementsShouldn'tbeRashlyDismantledduringSino-foreignNegotiatiott--CommentsonCriticalProvisionsconcerningDisputeSettlementintheu.s.andCanada'sModelBiTSText, Journal of International Economic Law (in Chinese), Vol. 13, No. 1, 2006, pp. 3-37; Wei Yanru, OntheImproprietyofChina'sRecentCompleteAaeptanceofICSID Jurisdiction, Joumal of International Economic Law (in Chincsc), Vol. 13, No. 1, 2006, pp. 109-144; Wang Hailang, FallingBehindorGoingFarBeyondtheZjm;f?—CAtKa'!ConsenttotheJurisdictiono_f ICS1D, Journal of International Economic Law (in Chinese), Vol. 13, No. 1, 2006, pp. 145-182. 167 Shang Ming, supra note 93, pp. 9-10. 168 The three countries are Germany, the Netherlands and Finland. is9 The 19 countries are Barbados, Congo, Botswana, Cyprus, Sierra Leone, Mozambique, Kenya, Burma, Bosnia and Herzegovina, Trinidad and Tobago, Jordan, Cote d'lvoire, Guyana, Benin, Latvia, Uganda, Djibouti, Tunisia, and the Deitx.
I�u Moc, supra note 3, p. 13. The four developing countries include Mozambique, Myanmar, Trinidad and Tobago, and DPax. The two countries are Germany and the Netherlands.
t�3 See, for example, China-Switzerland BIT. Article 5. ��4 See, for example, China-Guyana l3rr, Article 10(2); China-Germany BIT, Article 10(2). t�5 See Christoph Schreuer, TravellingtheBrrRoute — OfWaitingPeriods,UmbrellaClausesandForksintheRoad, 5J.W.I.T. 2, April 2004, pp. 250-251. 176 Zeng Huaquan (ed.), supra note 98, p. 487. 177 SCSSocieteGénéraledeSurveillanceS.A.v.IslamicRepublicof Pakistan, ICSID Case No. ARB/01 /13, Decision of the Tribunal on Objections to Jurisdiction, paras. 168, 170; available at: <http://www.worldbank.org/icsid/ cases/SGS-decision.pd£, last visited 10 June 2006. t�8ScsSociétéGeneraledeSurveillanceS.A.v.Republico% tltePhilippines, ICSID Case No. AKIS/02/6, Decision of the Tribunal on Objections to Jurisdiction, 29 January 2004, para. 128; available at: <http://wwv.worldbank.org/ icsid/cascs/SGSvYhil-tlnal.pd6, last visited 10 June 2006. 171CmsGasTransmissionCompanyv.ArgentineRepublic, 1(:sii) Case No. Aan/O1/8, para. 303; available at: ,http://www.worldbank.orglicsid/cases/CMS- Award.pd£, last visited 10 May 2006.
180 Sce Shu Xiaohong, International JusticeintheChangillgWorld, Peking University Press, 2005, pp. 129-140. 181 Vandevelde, supra, footnote 161, 1992, p. 25. 182 See in detail, Section III of this article. r"3 See, for example, Agreement between China and Zambia concerning the establishment of the Mixed Economic and Trade Commission, 22 October 1986. rR4 Also, in accordance with the Agreement on Trade-Related Investment Measures, China can seek remedy under the WTO dispute settlement system against any such measures taken by the specific WTO Member. r"5 The main reason is that these developed countries are confident in the "fairness and efficacy of their governments and legal system". See Carlos G. Garcia, AlltheOtherDirtyLittleSecrets:InvestmentTreaties,LatinAmerica,andtheNecrssaryEvilof Investor-StateArbitration, Florida Journal oflntemational Law, Vol. 16, 2004, p. 314. See Barton Legum, LessonsLeamedJrol1ltheNAFTA:TheNewGenerationof U.S.InvestmentTreatyArbitrationProvision, IcsiD Rev.-F.IL.J., Vol. 19, No. 2, 2004. 187 In the latest practice of the United States and Canada, the first countermeasure is that some kinds of disputes are prohibited to resort to international arbitration. See Wang Hailang, supra note 166, pp. 150-159. The second one is to seek the establishment of an appellate system in the current arbitration mechanism. See U.S.-Chile BIT, Annex 10-H.
18R See Shan Wenhua, ']7ieDeatlrandRevivalofCalvoDoctrine-RecentChangesofAttitudeof4qislationsconcerningInternationalInvestmentinLatin-AmericanCoiitittiesand77teirImplications forChina, Journal of International Economic Law (in Chinese), Vol. 13, No. 2006, pp. 193-201. 18'1 Denise Manning-Cahrol, TheIrnminentDeathoftheCalvoClauseandtheRebirth oftheCalvoPrinciple:Equalityof ForeignandNationalInvestors, Law and Policy in International Business, Vol. 26, 1994, p. 1169. ''"' Shan Wenhua, supra note 1138, p. 199. '`" The Country Risk in 22 countries is marked Grade A. All of them are developed countries, including Andorra, Liechtenstein, Luxembourg, Switzerland, Japan, Singapore, Austria, Belgium, Denmark, Finland, France, German. Iceland, Italy, the Netherlands, Norway, Spain, Sweden, the United Kingdom, Australia, Canada and the United States. See SrNOSUttE, supra note 85. 1')2 See, for example, the Protocol of the China-Germany BIT, Article 3.
See U.K.-Albania BIT, Article 3. 194 See, for example, the Protocol of the China-Germany BIT. 191 However, a few Sino-foreign BITS, such as the China-Thailand BIT and the China-Singapore BIT, do not establish a mechanism of this kind. 196 See, for example, China-Germany BIT, Article 13; China-Cluyana BIT, Article 13. See, for example, C',hina-Republic of Korea Bit, Article 14; China-Japan 13IT, Article 14. See NneTn, Article 2001. 1'" It is NAFTA tribunals' liberal interpretation of the content of "fair and equitable treatment" stipulated in Article 1105 of the NAFTA that prompted the F rc to issue a special note in July 2001. See NAFTA F rc;, supra note 136.
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1 Doctor and Associate Professor of International Law, Xiamen University School of Law, People's Republic of China; Executive Editor of Journal of International Economic Law (in Chinese). The author may be contacted at: ‹firstname.lastname@example.org› or ‹email@example.com›.