A Comparative Study of China’s Bilateral Investment Treaties (BITs) with Selected Eastern African Countries: Gaps, Outdated Frameworks, and Modern Developments

It has been a while since Chinese investors established their dominant presence in Africa. Despite this, most Sino-African BITs are often criticised for failing to strike a balance between promoting Chinese investments and protecting public interests. Thus, this research examines the sufficiency of the existing international legal protections available to Chinese investors in Eritrea, Ethiopia and Tanzania. In doing so, it employs a qualitative research method that is primarily dependent on a comparative legal analysis and thus analyses the China-Tanzania and China-Ethiopia BITs by comparing them with each other and with other more recent BITs. At the same time, it makes a thematic analysis, using the manner in which these BITs define “investment” and “investor”, the favourable treatments they offer, the “regulatory space” and indirect expropriation regime they establish, the ISDS mechanisms they provide access to, and their commitment to safeguard public interests as guiding parameters. It also examines the potential adverse impacts of the absence of a BIT between Eritrea and China on their investment relations. The findings reveal that the legal protections available to Chinese investors vary significantly between the selected countries- from nothing in Eritrea to weak in Ethiopia and to relatively robust and comprehensive in Tanzania. The Sino-Ethiopian investment relationship is governed by an old BIT that has many limitations, making the available legal protections weak. In contrast, the Sino-Tanzanian investment relationship operates under a modern BIT designed to strike a balance between attracting Chinese investment and safeguarding Tanzania’s broader public interests, resulting in comprehensive and robust legal protections. Hence, this research recommends the conclusion of a BIT between Eritrea and China, a replacement (renegotiation) of the China-Ethiopia BIT, and a revision of the China-Tanzania BIT so that environmental concerns, human rights issues, and social development notions, including corporate social responsibility, are addressed adequately. It, in particular, calls Eritrea and Ethiopia to draw lessons from the China-Tanzania BIT, and thereby create a legal environment conducive to Chinese investors while at the same time ensuring that their domestic investors are not chocked and the natural environment and other public interests are not jeopardised