The Dilemma of Investor Rights Protection in the Belt and Road Initiative and Institutional Reconstruction

The Belt and Road Initiative (BRI) has spurred overseas investment by Chinese enterprises. However, investors in host countries face risks of "regulatory takings" arising from fragmented environmental legislation and arbitrary enforcement, alongside systemic governance gaps due to ineffective regulatory oversight in host states. These issues underscore deficiencies in the investment protection regimes of BRI partner countries. Concurrently, the current Investor-State Dispute Settlement (ISDS) mechanism exacerbates conflicts of interest between host states and investors by excessively prioritizing investor rights. This study focuses on the core issue of balancing investor rights protection with host states' public interests. Applying normative analysis, case studies, and comparative research methods, conducts an in-depth examination of the institutional dilemmas affecting investor rights protection under the BRI and their underlying causes. The research proposes that institutional reconstruction hinges on establishing a dynamic equilibrium framework: on the one hand, International Investment Agreements (IIAs) require optimization through clarifying indirect expropriation criteria, defining the scope of Fair and Equitable Treatment (FET), and incorporating exception clauses for social responsibilities and public interests; on the other hand, dispute resolution mechanisms should be innovated by exploring a multi-tiered settlement system integrating mediation and arbitration, while advancing the top-level design of a BRI Investment Protection Convention. This study aims to provide institutional solutions for reconciling investment protection with host states' regulatory sovereignty, thereby facilitating the rule of law and sustainable development of the Belt and Road Initiative.