Does SCO need its own energy charter treaty? From the perspective of Chinese BITs

Abstract

Abstract Since the reform and opening up, China has developed into a major energy importer and become increasingly dependent on the international energy market. Owing to the impact of shale oil exploration and gas extraction in the USA, the influence of Russia and Organization of the Petroleum Exporting Countries (OPEC) on international oil prices, and the increasing development of clean energy technologies, China’s energy supply and security are facing serious challenges. This international energy landscape highlights the need to strengthen energy investment and cooperation among Shanghai Cooperation Organisation (SCO) Member States. However, energy resources are distributed unevenly among the SCO Member States. Specifically, some Member States are rich in energy resources and highly dependent on energy exports for national economic development, which can form a satisfactory supply and demand relationship with China. Therefore, strengthening energy cooperation in SCO is conducive to not only maintaining energy security in the SCO region but also promoting overall regional development and further deepening the economic interconnectivity. An important prerequisite for strengthening energy cooperation between countries is the legal mechanisms for energy investment protection. However, current legal foundations for energy investment among SCO Member States rely mainly on bilateral investment treaties between Member States, which are largely outdated and inconsistent. Likely, this status quo is not conducive to the stable regional energy cooperation for sustainable operation. The purpose of this article is to examine the need to build a unified legal mechanism for energy investment protection under the SCO framework. Accordingly, China should emphasize this legal mechanism to protect the country’s foreign energy investment in the SCO.