China's instrumentalist greenisation of the new‐generation IIAs

Abstract In the context of the global trend of greening international investment agreements (IIAs) after Rio+20, China is taking a more active role in greening its IIAs than before, albeit with inconsistent patterns. This article analyses the driving factors for its change after Rio+20 and argues that China's IIA greenisation is instrumentalist at heart. This approach provides the best flexibility for China to conclude more numbers and types of pro‐environment provisions, thereby helping China mitigate the overall insufficiency of environmental protection in the existing IIAs. At the same time, however, it leads to grave fragmentation in the substance of these provisions since they have various levels of coverage and deference to environmental protection. An overly flexible instrumentalist approach also raises the overall regulatory cost and hinders China from adopting a coherent and formal green investment framework, which may undermine its long‐term aspirations towards ‘ecological civilisation’ and showcase China's contribution to the global efforts towards a green transition. China should realign its approach with its environmental commitments via unilateral, bilateral and regional efforts. A Model IIA and more coherent and enforceable investment policy should be adopted to green its IIA network and domestic regulations on overseas investment.