Beyond BITs: Unravelling China's Economic Statecraft in FDI Protection

• In Event: East Asia and the Global Political Economy

Abstract

Over the past four decades China has become a prolific signatory of bilateral investment treaties (BITs). However, a puzzling asymmetry exists between the higher level of protection China grants to developed countries investing in its domestic market, and what China accepts when it invests in developing countries. Using a new dataset which measures the investor friendliness of 144 Chinese BITs, I show that discrepancies in the levels of protection between Chinese BITS with developed and developing countries persist over time, challenging conventional explanations of a learning curve in China’s capital-importer to exporter transition. I argue that China relies on alternative persuasion mechanisms to protect its investments abroad, including leveraging its economic clout as a financing provider and key trade partner. This research contributes to our understanding of China's economic statecraft and the interplay between formal and informal mechanisms of investment protection.

Author

• Rodrigo Moura, University of Essex