1. The Chinese BITs in the 21st Century Protecting Chinese Investment

2. The new China-Germany BIT The new Agreement on the Encouragement and Reciprocal Protection of Investments between China and Germany, concluded in 2003, entered into force on 11 November 2005 The new Agreement on the Encouragement and Reciprocal Protection of Investments between China and Germany, concluded in 2003, entered into force on 11 November 2005 It replaces the old China-Germany BIT from 1983. It replaces the old China-Germany BIT from 1983.

3. Improvements The new China-Germany BIT includes some improvements reflecting the modified, i. e. liberalized, economic system of China: The new China-Germany BIT includes some improvements reflecting the modified, i. e. liberalized, economic system of China: - the definition of investor with respect to China; - a basically unlimited free transfer of investments and returns

4. National treatment in the old BIT The old China-Germany BIT did not contain an explicit national treatment provision. The old China-Germany BIT did not contain an explicit national treatment provision. Article 3(4): in accordance with domestic laws and regulations, each contracting party shall not take discriminatory measures against investments of investors of the other contracting party and enterprises involving such investments Article 3(4): in accordance with domestic laws and regulations, each contracting party shall not take discriminatory measures against investments of investors of the other contracting party and enterprises involving such investments The national treatment was implicitly granted. The national treatment was implicitly granted.

5. National treatment in the new BIT The new China-Germany BIT explicitly provides for the national treatment in the post- establishment phase, without the qualification of “ in accordance with laws and regulations ”. The new China-Germany BIT explicitly provides for the national treatment in the post- establishment phase, without the qualification of “ in accordance with laws and regulations ”. Article 3(2): Each contracting party shall accord to investments and activities associated with such investments by investors of the other contracting party treatment not less favorable than that accorded to the investments and associated activities by its own investors Article 3(2): Each contracting party shall accord to investments and activities associated with such investments by investors of the other contracting party treatment not less favorable than that accorded to the investments and associated activities by its own investors

6. National treatment in the new BIT Grandfathering of China ’ s existing non- conforming measures Grandfathering of China ’ s existing non- conforming measures A standstill obligation on China: not to take new non-conforming measures A standstill obligation on China: not to take new non-conforming measures A “ best efforts ” rollback promise by China A “ best efforts ” rollback promise by China

7. The investor-state dispute settlement in the old BIT Limited access to international arbitration: only disputes concerning an amount of compensation Limited access to international arbitration: only disputes concerning an amount of compensation

8. The investor-state dispute settlement in the new BIT A far-reaching consent of the contracting parties to international arbitration for “ any dispute concerning investments ” A far-reaching consent of the contracting parties to international arbitration for “ any dispute concerning investments ” Two pre-conditions: Two pre-conditions: - administrative review in China; - the rule of so-called fork in the road

9. The high-level investment protection National treatment and investor-state dispute settlement mechanism are among the most important elements in BITs for investment protection. National treatment and investor-state dispute settlement mechanism are among the most important elements in BITs for investment protection. The improvements in the new China-Germany BIT with respect to these two elements indicate a high level of investment protection. The improvements in the new China-Germany BIT with respect to these two elements indicate a high level of investment protection.

10. Is the high-level investment protection in the new China- Germany BIT a special case? Is the high-level investment protection in the new China- Germany BIT a special case? Does it represent the current attitude of China towards the foreign investment protection through BITs? Does it represent the current attitude of China towards the foreign investment protection through BITs?

11. The national treatment in Chinese BITs The absence of national treatment provisions is a specialty of the Chinese BITs in 1980s and 1990s in comparison to BITs signed by other countries. The absence of national treatment provisions is a specialty of the Chinese BITs in 1980s and 1990s in comparison to BITs signed by other countries. Only a small part of the Chinese BITs in this period contains a national treatment clause: for example, BITs with Germany, the United Kingdom and Japan. Only a small part of the Chinese BITs in this period contains a national treatment clause: for example, BITs with Germany, the United Kingdom and Japan.

12. The national treatment in Chinese BITs The post-establishment national treatment obligation has been provided for in most of the new Chinese BITs concluded in the 21st century. The post-establishment national treatment obligation has been provided for in most of the new Chinese BITs concluded in the 21st century. National treatment obligation similar to the one in the China-Germany BIT in 8 other Chinese BITs: the BITs with Bosnia-Herzegovina, the Czech Republic, Finland, India, Netherlands, Portugal, Seychelles and Spain National treatment obligation similar to the one in the China-Germany BIT in 8 other Chinese BITs: the BITs with Bosnia-Herzegovina, the Czech Republic, Finland, India, Netherlands, Portugal, Seychelles and Spain

13. The national treatment in Chinese BITs Other 11 Chinese BITs contain a national treatment clause conditioned by “ without prejudice to its laws and regulations ” : the BITs with Benin, Botswana, the Cote d ’ Ivoire, Djibouti, Guyana, Jordan, the DPR Korea, Latvia, Russia, Trinidad and Tobago, as well as Vanuatu. Other 11 Chinese BITs contain a national treatment clause conditioned by “ without prejudice to its laws and regulations ” : the BITs with Benin, Botswana, the Cote d ’ Ivoire, Djibouti, Guyana, Jordan, the DPR Korea, Latvia, Russia, Trinidad and Tobago, as well as Vanuatu.

14. The investor-state dispute settlement in Chinese BITs The investor-state dispute settlement provisions in the old China-Germany BIT was typical for most of the Chinese BITs conducted before 2000. The investor-state dispute settlement provisions in the old China-Germany BIT was typical for most of the Chinese BITs conducted before 2000. The far-reaching consent to international arbitration in the new China-Germany BIT has never been seen in the old Chinese BITs, but is present in most of the BITs in the 21st century. The far-reaching consent to international arbitration in the new China-Germany BIT has never been seen in the old Chinese BITs, but is present in most of the BITs in the 21st century. The significance of this difference should never been underestimated. The significance of this difference should never been underestimated.

15. Conclusions The national treatment and investor-state dispute settlement provisions differentiate the Chinese BITs conducted since 2000 from their predecessors. The national treatment and investor-state dispute settlement provisions differentiate the Chinese BITs conducted since 2000 from their predecessors. Those new BITs could be regarded as a new generation of Chinese BITs in the 21st century. Those new BITs could be regarded as a new generation of Chinese BITs in the 21st century. The main reason for development of this new generation: protecting Chinese investment The main reason for development of this new generation: protecting Chinese investment

16. Thanks!