Deciphering China’s Selective Adaptation to Investment Treaty Regime: A “Domestication” of International Investment Law Perspective

Abstract As China emerges as a prominent economic powerhouse and a key stakeholder in the international economic legal order, academic discourse beams the searchlight on its approach to international investment law. While discussions often center on the “external adjustment perspective” and explicate China’s participation in international investment law by analyzing different iterations of Sino-Foreign investment treaties, a noteworthy yet underexplored inquiry pertains to how Chinese domestic legal frameworks assimilate and repurpose investment treaty norms. This article elucidates China’s investment treaty policy through the lens of the “domestication of International Economic Law”, which is a new and significant theoretical development under current “de-globalization” challenges. It delves into how China’s domestic legal constructs pertaining to investment treaties and arbitration subtly but significantly discourage foreign investors from initiating investment treaty arbitration, forming an integral part of China’s investment treaty policy. Essentially, the dual-track approach arises from China’s simultaneous need to actively engage in the investment treaty regime to reap practical benefits, while maintaining deep-seated ideological and political reservations towards investment arbitral claims. This article explores the Chinese experience as a contributor to enhancing the understanding of how domestic-level legal framings may have implications for international investment law and international adjudication in the context of the domestication of IEL. It also juxtaposes China’s approach towards international investment law with its participation in general international law, unveiling a strategic alignment marked by “selective adaptation” to international norms. Essentially, China’s approach to international law mirrors its consistent diplomatic strategy.