CWR > Volume 7(2); 2021 > Article
Research Paper
Published online: Sept 1, 2021

China’s Engagement in ISDS Reform: Text, Practice, and Political Economy

Wei Shen & Shuping Li
Shanghai Jiaotong University Law School
No.1954 Huashan Road, Shanghai 200030 P. R. China.
Corresponding Author:

ⓒ Copyright YIJUN Institute of International Law. This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License ( which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.


The investor-state dispute settlement (ISDS) system is such a means to an end of further economic development and wider social political goals. With major protective provisions of expropriation against compensation, fair and equitable treatment, national treatment, most-favored-nation treatment, full protection and security and umbrella clause, it helps establish a predictable, transparent, and enforceable legal regime to protect foreign investors’ legitimate expectations and lawful investment. As China intends to attract foreign investments by offering a stable business operation environment, its signing a large number of BITs and FTAs may help reduce political and socio-economic risks, which give states, businesses, and individuals the confidence to work in a coordinated manner. The economic development goal, rule of law strategy, tense US-China relations, ideology of multilateralism and community of common destiny, all add up to China’s inclination to incremental but effective ISDS reform.

Keywords : ISDS, ISDS Reform, BIT, International Investment Arbitration, Political Economy

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