Global Reform of Investor-State Arbitration : A Tentative Roadmap of China's Emergent Equilibrium

Investor-state arbitration is in a state of flux. In recent years, doubts about its adequacy have become apparent: questions of coherence, consistency, legitimacy and utility have rendered fragile the central place of investor-state arbitration in global FDI governance. Three threads of reform have been advanced as a corrective to these deficiencies, encompassing incremental reform, institutional reform and fundamental reform. China is perhaps the most influential nation not to have declared a preference for one future or another.For over a decade, the Chinese approach to investor-state arbitration has been in a state of disequilibrium: bilateral investment treaties have routinely made provision for investor-state arbitration, and yet these provisions have lain dormant. Though still in its infancy, recent developments in China-related arbitrations suggest a new willingness to utilise these provisions, setting the course for a convergence of Chinese law and practice. In the context of substantial FDI inflows, growing FDI outflows, and an extensive web of international investment agreements, China has the potential to assume a leading role in the development of dispute-settlement mechanisms around the globe. This article considers whether China’s interests are best served by the promotion of investor-state arbitration, and whether this approach is likely to involve incremental reform, institutional reform or fundamental reform