The Status of Chinese State-owned Enterprises in International Investment Arbitration: Much Ado about Nothing?

Abstract

Abstract Chinese State-owned enterprises (SOEs) play a key role not only in China’ domestic market, but also in implementing the Government of China (GOC)’s ambitious Belt and Road Initiative. Accordingly, Chinese SOEs have increasingly fallen back on investor-State investment arbitration to protect their investments in host States. A recurrent issue arising in arbitral proceedings concerns whether Chinese SOEs should be allowed access to investor-State dispute settlement mechanisms in view of the close links between Chinese SOEs and the GOC. This article sets forth two arguments. First, applying the relevant ILC Articles to Chinese SOEs, the article makes a legal argument that it is highly unlikely for a Chinese SOE to be denied standing as a qualified claimant in investor-State arbitration. Second, notwithstanding concerns about Chinese SOEs in the global investment landscape, the article makes a policy argument that the denial of Chinese SOEs’ standing before arbitral tribunals is not only unhelpful in addressing those concerns, but also undermines the rule of law in international investment.