Should the Four “Great Safeguards” in Sino-foreign BITs Be Hastily Dismantled? Comments on Critical Provisions Concerning Dispute Settlement in Model US and Canadian BITs

Abstract

China has concluded bilateral investment treaties (BITs) with more than 110 countries and now is continuing to conclude some new ones or revise some existing ones. It is recognized that, in recent relevant negotiations, some BIT drafts provided by foreign counter-countries are based on US or Canada Model BITs with moderate modifications. This chapter devotes in examining some critical provisions concerning disputes settlement in US and Canada Model BITs. The author suggests that such provisions, in essence, require the host country to abandon its rights to “consent case by case,” to “exhaust local remedies,” and to “apply the host country’s laws” and even abandon the right to invoke the “exception for State essential security.” Such requirements not only deprive the authorizations by the relevant international conventions to host countries and conflict with the current circumstances in China but also overlook the serious lessons provided by some developing countries and ignore the shift of latest legislations of some host countries. Hence, China, in the course of negotiating BITs, should insist on stipulating in related BITs such rights authorized by the relevant international law, well control the four “Great Safeguards,” so as to effectively protect China’s national interests as well as to play a model role in the course of establishing reasonable legal norms toward foreign investments and the New International Economic Order.