Investments rules in Chinese preferential trade and investment agreements

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Is China embracing preferential trade and investment agreements (PTIAs) that extend beyond the investment rules in its bilateral investment treaties (BITs)? This paper empirically examines the investment rules in Chinese PTIAs, using China’s BIT practices and international PTIA standards as benchmarks. The analysis involves a content review of Chinese PTIAs and BITs, along with selected partner country PTIAs. Additionally, insights from interviews with Chinese officials and stakeholders involved in negotiations with various partner countries illuminate the policy processes shaping China’s PTIA developments. The findings suggest that China is adopting a partially “NAFTA-ized” PTIA policy, aligning with its recent BIT offerings. Innovative treaty language emerges from partner country PTIA policies during negotiations, with references to international minimum standards, prohibitions on performance requirements, transparency rules, and environmental provisions becoming integrated into Chinese PTIAs. However, China resists partner countries' efforts to include commitments aimed at liberalizing its investment regime. For the Chinese government, PTIAs are not viewed as opportunities to expand beyond the confines of its BITs; rather, its BIT practices set the boundaries for its PTIA policy.