Chinese interests in the global investment regime

Abstract

China is rising as a major source of outward direct investment (ODI), but barriers to and protectionism against Chinese investment have been strengthened as well. This situation reflects inherent flaws in the architecture governing international investment. This article identifies three of China’s key interests in the global investment regime: (1) to reduce investment barriers and depoliticize foreign regulatory review processes; (2) to ensure better protection of its overseas investment; and (3) to secure international recognition of its unique identity in terms of institutional characteristics and development strategy. As China shows more and more interest in building the architecture governing international investment, we suggest that improving investment governance at the bilateral, regional, and multilateral levels is the best strategy for China to adopt. Strategies that China should pursue include (1) accelerating the negotiation and revision of bilateral investment treaties (BITs); (2) promoting regional and sub-regional cooperation; and (3) contributing to the architecture governing global investment.