Procedural Models to Upgrade BITs: China's Experience

Abstract

AbstractWith the rise of a new generation of investment policies, upgrading existing bilateral investment treaties (BITs) is of significant interest to states. China has upgraded 28 per cent of its investment treaties in various ways. Two investment arbitration tribunals and one highest court at the seat of arbitration have recently rendered decisions favouring the application of old Chinese BITs over the upgraded ones. China's experience with upgrading BITs may provide general policy discourse and direction for other countries planning to upgrade their BITs. Using China's experience, this article categorizes different methods of upgrading BITs into the Coexistence Model (parties to an old BIT join existing or new free trade agreements or a regional investment agreement), the Replacement Model (replace an old BIT with a new one), the Amendment Model (amend an old BIT by a protocol) and the Joint Interpretation Model (make a diplomatic announcement to interpret a BIT). This article also discusses the benefits and challenges of each model and concludes with directions for future BIT upgrading.