China’s approach in drafting the investor–state arbitration clause: a review from the ‘belt and road’ regions’ perspective

Investor-State arbitration (ISA) is now a hot topic in China and among its trade and investment partners. The number of ISA cases is still small, and doubts are still widespread at the policy-making level and among scholars. In particular, the drafting and practice of China’s ISA clauses is not flawless in supporting investors in ISA or in defending their national interests as a host country. This article aims to review the main aspects of China’s approach in drafting ISA clauses in the context of the One Belt, One Road Initiative (OBORI). It reviews ISA clauses in bilateral investment treaties and other international investment agreements between China and the One Belt and One Road (OBOR) region countries and discusses the relevant legal issues and controversies.Issues covered include: different generations of ISA clauses, the scope of arbitrable disputes, applicable law, the choice of arbitration institutions, procedural arrangements, the enforcement of arbitral awards, the impact of transition clauses, and so on. Based on the review and analysis of these issues, divergence is identified in the currently existing ISA clauses between China and the OBOR regions, although some degree of policy convergence can be found in a few of the most recent international investment agreements.It is both a challenge and an opportunity for China to learn from its previous experience with ISA clauses and to integrate its treaty-making approach in the context of the OBORI. A more adaptable Model ISA clause and a more consistent approach to the drafting of ISA clauses would benefit both China and its trade and investment partners