International Investment Law and the Rule of Law: The Case of China

This article purports to discuss the impact of international investment law on domestic governance and the rule of law of a nation state. Using China as a case study, this article argues that the role of international investment law in advancing domestic rule of law has long been overstated. The prevailing narrative is premised on some deeply flawed assumptions of the nature and function of international investment law as well as how international investment law may affect domestic legal change. These assumptions include, inter alia: (1) international investment norms possess the rule of law ideals; (2) improving good governance and the rule of law is part of the mandate of international investment law; (3) powerful investor-state dispute settlement is effective in guarding the rule of law; and (4) the state is readily receptive to all direct and indirect influences of economic globalization.

A close examination of the limits of international investment law in this article explains why its role in promoting the rule of law in China is rather limited, contrary to what was widely expected in the Western world.