On Whether Investment Agreements Of China Apply To Hong Kong And Macao

The case of Tza Yap Shum v.the Republic of Peru in 2006 and the case of Sanum Investments Limited v.Lao People’s Democratic Republic in 2012 have aroused the debate of whether the investment agreements signed by the central government of China should apply to Hong Kong and Macau.As China implements the policy of "One Country,Two Systems",the investment agreements signed by the central government of China normally do not apply to Hong Kong and Macau.However,according to article 29 of VCLT,unless a different intention appears from the treaty or is otherwise established,a treaty is binding upon each party in respect of its territory.So,China’s domestic law conflicts with international law.In order to ascertain the application of the investment agreements signed by the central government of China in Hong Kong and Macau,increase predictability of application of investment agreements,the rule of treaty interpretation and moving treaty frontier would be researched.Regarding the rule of treaty interpretation,as the definition of "territory" is not clear,it is necessary to interpret the notion of "territory" in investment agreements according to article 31 and 32 of VCLT.After interpreting from the ordinary meaning of "territory",context,object and purpose and supplementary means,it is concluded that the investment agreements signed by the central government of China do not apply to Hong Kong and Macau.Regarding the rule of moving treaty frontier,unless it appears from the investment agreements or is otherwise established that the application would be incompatible with its object and purpose or would radically change the conditions for the operation of the agreements,the investment agreements signed by the central government of China should apply to Hong Kong and Macau.Due to the silence of the application in the investment agreements,it could not ascertain from the agreements themselves.With respect to the exception of "otherwise established",as the commentaries of VCLT and VCST make no comments on its standard,the evidence such as Sino-British Joint Declaration,Sino-Portuguese Joint Declaration,1997 UNSG Note and 1999 UNSG Note would be analyzed.According to Hong Kong and Macau’s practice of signing treaties and participating international organizations,the autonomy of Hong Kong and Macau has been acknowledged by the international society.Sino-British Joint Declaration and Sino-Portuguese Joint Declaration are the legal basis of the autonomy,so relevant countries and international organizations should also be conscious ofChina’s arrangement of the application of international agreements in Hong Kong and Macau.1997 UNSG Note and 1999 UNSG Note are political statements regarding the application in Hong Kong and Macau of China’s treaties which include multilateral and bilateral treaties.UN members and specialized agencies have been informed of the two notes by UNSG and no objection has been raised.Therefore,the countries have reached a consensus on the non-application of the investment agreements signed by the central government of China in Hong Kong and Macau.To sum up,it is otherwise established that the investment agreements signed by the central government of China do not apply to Hong Kong and Macau.