China and International Investment Law1

Abstract

This chapter analyzes the role of law in Chinese international investment activities. It begins by tracing the historical development of foreign direct investment both in and out of China, and then explores the legal framework governing such investments. Next, it considers the most important legal issues involved in international investment, namely the admission regime, the general standards of treatment, expropriation and compensation, transfer, and dispute resolution. It discusses the interaction between China's international and domestic norms in regulating foreign investment activities. It considers the extent to which the European-styled bilateral investment treaty model has been modified to suit “Chinese characteristics.”. It concludes that although the extensive regulatory framework has contributed to China's success in foreign investments, China must do more to strengthen the framework and prepare for its changing role from a participant to a leader in international investment activities.