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Chinese Perspectives on the Rule of Law in International Economic Law

Published online by Cambridge University Press:  07 March 2024

Jun Xiao Open the ORCID record for Jun Xiao [Opens in a new window]
Jun Xiao*
Affiliation:
Wuhan University, Law School, Institute of International Law (China), Wuhan, China
*
Email: junxiao70@qq.com
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Abstract

In the currently volatile global economic environment, China’s perspectives on the rule of law in international economic law are of significance. In principle, China shares developing countries’ attitudes towards international economic law. China also seeks to play a constructive role in the development of international economic law, endorsing a flexible and pragmatic approach. China has concluded international trade and investment treaties designed to constrain its policy space and is an active supporter of the World Trade Organization’s dispute settlement and investor-state dispute settlement mechanisms, with a good record of compliance. Recent trade tensions demonstrate challenges for the international rule of law but also emphasise the role of law in overcoming political challenges.

Keywords

China’s perspectiveinternational economic lawrule of law
Type
Articles
Information
European Journal of Risk Regulation , First View , pp. 1 - 10
Copyright
© The Author(s), 2024. Published by Cambridge University Press

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References

1 H Zhao, “International Law at a Crossroad – The International Rule of Law: An Ideal and the Reality” (2020) 19 Journal of WTO and China 3, 4.

2 UN GA Res adopted on 24 September 2012, Declaration of the High-level Meeting of the General Assembly on the Rule of Law at the National and International Levels, UN DOC A/RES/67/1.

3 Y Wang, “China: A Staunch Defender and Builder of the International Rule of Law” (2014) 13 Chinese Journal of International Law 635.

4 See M Kanetake, “The Interfaces between the National and International Rule of Law: A Framework Paper” in M Kanetake and A Nollkaemper (eds), The Rule of Law at the National and International Levels: Contestations and Deference (Oxford, Hart Publishing 2016) p 19.

5 R Dworkin, “The Rule of Law” (2013) 2013 Law of Ukraine: Legal Journal 7.

6 For the emergence of the constituent elements of the rule of law in Europe, see the contribution by de Sadeleer and Damjanovic in this issue.

7 Dworkin, supra, note 5, 8; see also J Raz, The Authority of Law: Essays on Law and Morality (Oxford, Oxford University Press 1979) p 222.

8 Panel Report, US – Tariff Measures on Certain Goods from China, WT/DS543/R, para 9.2.

9 See PC Mavroidis and A Sapir, “State Capitalism in the GATT/WTO Legal Order” (2023) 26 Journal of International Economic Law 154, 163.

10 On those differences, see the contribution by de Sadeleer in this issue.

11 J Woldron, “Are Sovereigns Entitled to the Benefit of the International Rule of Law?” (2011) 22 European Journal of International Law 315.

12 See the contribution by de Sadeleer and Damjanovic in this issue.

13 M Herdegen, Principles of International Economic Law (2nd edition, Oxford, Oxford University Press 2016) p 3.

14 See, eg, D Collins, Foundations of International Economic Law (Cheltenham, Edward Elgar 2019) p 215.

15 See the contribution by Alexovicova in this issue.

16 See, eg, UN DOC A/RES/61/39, A/RES/77/110.

17 Key documents of the UN on this topic, including GA resolutions, annual reports of the Secretary-General and other reports of the Secretary-General and of the Security Council, are available at <https://www.un.org/ruleoflaw/key-documents/> (last accessed 2 July 2023).

18 Statement by H.E. Ambassador Wang Min on the Rule of Law at the National and International Levels at the 68th Session of the UN General Assembly <https://www.un.china-mission.gov.cn/eng/chinaandun/legalaffairs/sixthcommittee1/201310/t20131011_8412182.htm> (last accessed 2 July 2023).

19 Summary record of the 6th meeting: 6th Committee, held at Headquarters, New York, on Tuesday, 12 October 2021, General Assembly, 76th session, A/C.6/76/SR.6, para 3.

20 See, eg, A Reinisch and C Schreuer, International Protection of Investment: The Substantive Standards (Cambridge, Cambridge University Press 2020) pp 342–44.

21 R Dolzer, U Kriebaum and C Schreuer, Principles of International Investment Law (3rd edition, Oxford, Oxford University Press 2022) p 198.

22 N Gallagher and W Shan, Chinese Investment Treaties: Policies and Practice (Oxford, Oxford University Press 2009) p 128.

23 In recent decades, China prefers to incorporate investment chapters into its free trade agreements.

24 J Xiao, “How can a prospective China–EU BIT contribute to sustainable development: in light of the UNCTAD Investment Policy Framework for Sustainable Development” (2015) 8 Journal of World Energy Law & Business 527.

25 J Xiao, “ASEAN–China FTA: a pragmatic approach to regulating services and investment” in P Gugler and J Chaisse (eds), Competitiveness of the ASEAN Countries: Corporate and Regulatory Drivers (Cheltenham, Edward Elgar 2010) p 256.

26 Although concluded at the end of 2022, the CAI has not been ratified yet.

27 China–Chile FTA Art 108, China–Iceland FTA Art 96, China–New Zealand FTA Art 177 and China–Switzerland FTA Art 13.5.

28 WTO, Singapore Ministerial Declaration, adopted on 13 December 1996 <https://www.wto.org/english/thewto_e/minist_e/min96_e/wtodec_e.htm> (last accessed 2 July 2023).

29 See Y Yan, “A New Chapter on China’s Stance in Labour Protection? An Assessment of the China–EU CAI” (2022) 25 Journal of International Economic Law 466.

30 ILO, “ILO welcomes China’s move towards the ratification of two forced labour conventions” (20 April 2022) <https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_842739/lang--en/index.htm> (last accessed 2 July 2023).

31 See Mavroidis and Sapir, supra, note 9, 154–55. They pointed out that there is no single definition of the term “state capitalism”, but China is the typical example of state capitalism and by far the biggest economy with this type of system.

32 See, eg, M Du, “Explaining China’s Tripartite Strategy toward the Trans-Pacific Partnership Agreement” (2015) 18 Journal of International Economic Law 407, 414.

33 In September 2021, China applied to join the CPTPP.

34 See Du, supra, note 32, 429–31.

35 For information on MPIA participants and cases, see <https://wtoplurilaterals.info/plural_initiative/the-mpia/> (last accessed 2 July 2023).

36 For example, Art 13(3) of the China–Singapore BIT signed in 1985.

37 Art 9(1) of the China–Barbados BIT.

38 United Nations, Possible reform of investor-state dispute settlement (ISDS), Submission from the Government of China, Note by the Secretariat, A/CN.9/WG.III/WP 177, 19 July 2019 <https://documents-dds-ny.un.org/doc/UNDOC/LTD/V19/073/86/PDF/V1907386.pdf?OpenElement> (last accessed 2 July 2023) 2, 4.

39 See the contribution by Damjanovic in this issue.

40 See, eg, E Sardinha, “The Impetus for the Creation of an Appellate Mechanism” (2017) 32 ICSID Review 503–14; J Kurtz, “Building Legitimacy through Interpretation in Investor-State Arbitration: On Consistency, Coherence and the Identification of Applicable Law” in Z Douglas et al (eds), The Foundation of International Investment Law: Bringing Theories into Practice (Oxford, Oxford University Press 2014) p 270.

41 See United Nations, Possible reform of investor-State dispute settlement (ISDS): Consistency and related matters, Note by the Secretariat, A/CN.9/WG.III/WP.150, 28 August 2018, 2–11.

42 Those cases are Ekran Berhad, ICSID Case No. ARB/11/15; Ansung Housing, ICSID Case No. ARB/14/25; Hela Schwarz GmbH, ICSID Case No. ARB/17/19; Jason Yu Song, PCA Case No. 2019-39; Macro Trading Co., Ltd, ICSID Case No. ARB/20/22; Goh Chin Soon, PCA Case No. 2021-30 (formerly ICSID Case No. ARB/20/34); AsiaPhos Limited and Norwest Chemicals Pte Ltd, ICSID Case No. ADM/21/1; Eugenio Montenero, ad hoc arbitration under UNCITRAL Rules.

43 In the Ansung and AsiaPhos cases, the tribunals declined the jurisdiction.

44 W Zhou, China’s Implementation of the Rulings of the World Trade Organization (Oxford, Hart Publishing 2019) p i.

45 J Bacchus, S Lester and H Zhu, “Disciplining China’s Trade Practices at the WTO” (2018) CATO Institute Policy Analysis No. 856, 1–2 <https://www.ssrn.com/abstract=324657> (last accessed 2 July 2023).

46 See J Pauwelyn, “WTO Dispute Settlement Post 2019: What to Expect?” (2019) 22 Journal of International Economic Law 303.

47 For instance, in cases involving China as a complainant: United States – Tariff Measures on Certain Goods from China (DS543) and United States – Certain Measures on Steel and Aluminium Products (DS544).

48 According to para (a)(ii) of Art 15, importing WTO Members were, subject to certain conditions, exceptionally permitted to use a methodology not based on a strict comparison with domestic prices or costs in China. Para (d) provides that “[i]n any event, the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession” – in other words, on 11 December 2016.

49 See J Scott and R Wilkinson, “China and the WTO, Redux: Making Sense of Two Decades of Membership” (2022) Journal of World Trade 98.

50 See Europe Union – Measures Related to Price Comparison Methodologies, Request for the Establishment of a Panel by China, WT/DS516/9, para 6.

51 China – Anti-dumping and countervailing duty measures on barley from Australia, WT/DS598; China – Anti-dumping and countervailing duty measures on wine from Australia, WT/DS602; and China – Measures concerning Trade in Goods (EU), WT/DS610.

52 See B Czapnik and B Mercurio, “The Use of Trade Coercion and China’s Model of ‘Passive-Aggressive Legalism’” (2023) 26 Journal of International Economic Law 322.

53 W Zhou and J Laurenceson, “Demystifying Australia–China Trade Tensions” (2022) 56 Journal of World Trade 84.

54 Mavroidis and Sapir, supra, note 9, 156.

55 Czapnik and Mercurio, supra, note 52, 324.

56 Zhao, supra, note 1, 7.