The Current Situation And Improvement Path Of “The Rules Of The Right To Regulate” In China’s IIAs

With the rise of investor-state arbitration dispute,the regulatory space of host states is limited and the public interest is challenged,“the Rules of the Right to Regulate ” of host states is put forward and paid more and more attention to by many states.As a new concept introduced into the International Investment Law,the core of the Rules of the Right to Regulate is to protect the public interest of the host states,guarantee the flexible and independent policy space of host states,and promote the realization of the sustainable development goal.Currently,China is a large country with dual identity of capital-importing and capital-exporting country.However,by analyzing the Rules of the Right to Regulate in the current bilateral investment agreements(BITs)and the free trade agreements(FTAs)concluded by China,we find out that most IIAs lack relevant regulatory provisions or are rough in general,which is difficult to adapt to the current new situation of international investment.The content and obligations of the sovereign regulatory autonomy have not been shown in the existing IIAs in a clear and maneuverable way.And the relevant rules have not established a clear framework,and the hundreds of BITs lack treaty consistency with each other.The lack and confusion of Rules of the Right to Regulate in Chinese IIAs is mainly manifested in four aspects: firstly,Rules of the Right to Regulate has not formed a complete and orderly system;secondly,there is no oath in the preamble which can limit the interpretation of the investment protectionism;thirdly,the substantive clause is general and inconsistent,which can not clearly define the obligations of host states;fourthly,there is few exception clauses to define the limit of right for host states to regulate positively.From the perspective of historical analysis,we can clarify the reasons for the lack and confusion of Rules of the Right to Regulate.From the perspective of the international origin about IIAs,the original purpose of the traditional IIAs which is to protect the interests of investors in the capital exporting countries directly determines that traditional IIAs rarely contain Rules of the Right to Regulate.Disparities in contracting capacity exacerbate interest imbalances of IIAs.The proportion of Rules of the Right to Regulate in China’s BITs is even lower than the global average.The domestic reason contains not only limited contracting practice and contracting experience,but also the interest in attracting foreign investment to promote the development of domestic economy.At the end of the 20 th century,a series of economic regulation measures adopted in Argentina during the economic crisis led to a large number of investment arbitration cases.The United States and Canada are also frequently prosecuted under the NAFTA.All countries including developed countries have encountered challenges about public interest.At the same time,the international investment power of developing countries is growing.The main contradiction of the international investment law has gradually changed from“the north-south contradiction” to “the public-private conflict”.In this new situation,the Rules of the Right to Regulate have become a good way to balance the public interest of the host states and the private interest of the investors.Influenced by the reform of international investment law,the new generation treaties represented by2012 Sino-Canada BIT also reflect the inclusion of the Rules of the Right to Regulate,but there are still some deficiencies.At present,the investment rules of the world are in the process of reforming and remolding,and our country is facing the situation of renegotiating and signing new BITs and FTAs with many countries.In the process of the negotiation of investment agreement in the future,the following four aspects can be helpful to establish a clear,operational and systematic Rules of the Right to Regulate.Firstly,construct a complete and orderly system of the Rules of the Right to Regulate;secondly,bring the Rules of the Right to Regulate into the preamble of the treaty;thirdly,clarify the boundary of the obligations by using positive rules in the substantive clauses;fourthly,use the exception clauses to clarify the right of the host states positively.