Legal Status Of Chinese State-owned Enterprises In International Investment

The legal status of state-owned investors,of which their investment behavior should be considered as state behavior or private behavior,has been regarded as the first threshold for China's state-owned enterprises to ‘go internationally',directly affecting whether investment abroad of China's state-owned enterprises can obtain accordant protection.Judging from the signed investment agreement,at present,only 4% of the investment agreement in China has clearly indicated that state-owned enterprises belong to investors,but still nearly 100 investment agreements have used unclear expressions.Therefore,if only relying on the current vague expressions of the clause about ‘investor',it's difficult to provide literary support for the status of ‘qualified investors' of China's state-owned enterprises.Referring to the existing practice of the international community in defining the legal status of state-owned investors,though the model designation and expression of state-owned enterprises in both the2012 US Model BIT and the USMCA possess certain reference significance in reforming bilateral investment agreement,yet the provisions of statute law only constitute the initial conditions for the state-owned investors to obtain investment protection.Except that,even if the "competitive neutrality principle" which is promoted by developed countries is in line with China's reform direction,we still need to rationally look at the transition period in the reform process and be alert to other problems which could caused by excessive external constraints.On the premise of meeting the preliminary conditions,the state-owned enterprises still need to suffice the corresponding rules of identity judgment in order to acquire the same rights of investment protection as other subjects.In the case of Beijing Urban Construction Group Co.Ltd.v.Republic of Yemen,although Chinese investors have won the jurisdictional stage,yet due to unclear judging factors and the defect of too narrow scope of consideration existing in Broches standard itself applied by the arbitral tribunal of the International Center for Settlement of Investment Disputes(hereinafter referred to as ICSID),the theory of international law and argumentation of relevant cases should be combined to compensate for it in order to improve the relatively vague rule of identity judgment for state-owned enterprises.All taken into consideration,to better demonstrate the legal status of China's state-owned investors in international investment,this paper is divided into five parts,of which the contents are as follows:The first part is based on the Chinese legal texts.On the one hand,it starts from Chinesedomestic law to analyze the attitude behind our domestic law.On the other hand,it starts from Chinese BIT to analyze whether state-owned enterprises are treated as investors through different clauses.The second part is based on the relevant international texts.The report “ Foreign government-controlled investors and recipient country investment policies” which is published by the OECD has explained the competitive advantages of state-owned enterprises in foreign investment.At the same time,this part combine the clauses of state-owned enterprises in 2012 US Model BIT and USMCA,with a view to provide innovative suggestions for our BIT.The third part is based on international juridical practice,in Beijing Urban Construction Group Co.Ltd.v.Republic of Yemen to explain Broches standard,in combination with other related cases of ICSID,to analyze the limitation of Broches standard.The forth part is a theoretical supplement to identification rules of state-owned enterprises,including the theory of state immunity and state responsibility,in combination with other cases to propose a more comprehensive consideration of the legal status of state-owned investors.The fifth part is based on the above theoretical and practical analysis,through a“two-step” model to establish Chinese standard for determining the legal status of state-owned investors.This standard can base on Broches test,then define “government agency” as “government authority” and “government function” as “nature of behavior”.