China and international adjudication : caution, identity shifts, and the ambition to lead

"China aims to become a leader country in international law that guides the international legal order. Delivering the first comprehensive analysis of case law and Chinese academic debates from 2002 to 2018, this book shows that gradually increased engagement with international adjudication is part of a broad effort to consolidate China's economic and political gains, and regain great power status. It covers trade, investment, territorial and law of the sea matters - including the South China Sea disputes - and delineates a decades-long process between caution and ambition. Both in debate patterns and in actual engagement, this book finds remarkable similarities in all covered fields of law, merely the timetables differ"-- Back Cover Cover Table of Cases National Legislation Treaties and Other International Legal Instruments I. Introduction – International Adjudication and China’s Rise I.1. A New Ambition – ‘Guiding’ International Order I.2. How Nations Behave – China’s Growing Impact on International Adjudication II. Framework – Theoretical and Methodological Approach II.1. Introduction II.2. Previous Approaches and New Endeavor II.3. Theory and Methodology II.3.1. Theory – Conceptual Framework II.3.1.1. An Interdisciplinary Approach – Questions About Both the ‘Engine’ and the ‘Driver’ II.3.1.1.1. Positivism – Facts of Engagement II.3.1.1.2. International Law and International Relations – Reasons for Engagement II.3.1.2. Neoclassical Realism – Power, Structure, and All of Those Intervening Variables II.3.1.2.1. A Complicated History II.3.1.2.2. Reinventing Realism II.3.1.3. Image and Perception – Structure Relayed II.3.1.4. The Chinese Case – Characteristics and Caveats II.3.1.4.1. General Notions II.3.1.4.2. Articulated Perception and Cognitive Beliefs II.3.1.4.3. Published Elite Perception Since 2014 II.3.1.5. Final Remarks on Theory – Composite Approach II.3.2. Methodology, Structure and Sources III. Image – Historical Evolution of Chinese Positions on International Law III.1. Introduction III.2. History of Chinese Legal Thought III.2.1. General Questions of Law III.2.1.1. Roots – Confucianism Against Legalism III.2.1.2. Imperial Era – Confucian Legal Thought III.2.1.3. Modernity – Western and Soviet Influence III.2.1.3.1. Late Qing and Republican Reforms III.2.1.3.2. Soviet Models, Sino-Marxism and Pragmatism III.2.1.3.2.1. Soviet Influence III.2.1.3.2.2. Sino-Marxism III.2.1.3.2.3. Pragmatism III.2.1.4. Conclusion III.2.2. International Law – Sovereignty, Intervention, Adjudication III.2.2.1. Pre-Imperial Times – A ‘Chinese Community of Nations’? III.2.2.2. Imperial Era – Hierarchical Tributary System III.2.2.3. Unequal Treaties – Late Empire and Republican Period III.2.2.3.1. Definitional Issues III.2.2.3.2. Late Qing (1839–1911): Confrontation and Lasting Attitudes III.2.2.3.3. Republic (1912–1949): Struggle for Renegotiation III.2.2.4. Maoism (1949–1978) III.2.2.4.1. Early Years and Soviet Legal Thought (1949–1957) III.2.2.4.2. Sino-Marxism Outside the UN (1957–1971) III.2.2.4.2.1. Divergence from the Soviet Path III.2.2.4.2.2. Five Principles of Peaceful Co-Existence III.2.2.4.3. Pre-reform PRC in the UN (1971–1978) III.2.2.5. Pragmatism (1978-): Reform and Opening III.2.2.5.1. A new mindset III.2.2.5.2. Sources of International Law and Domestic Application III.2.2.5.3. Sovereignty and Human Rights III.2.2.5.4. Sovereignty and Intervention III.2.2.5.5. Sovereignty and Adjudication III.2.2.6. Conclusion IV. Object – PRC Practice in International Adjudication IV.1. Introduction IV.2. Economy IV.2.1. Phase One – the PRC and Investment Arbitration IV.2.1.1. China’s Accession to the ICSID Convention IV.2.1.2. China’s Evolving BIT Practice IV.2.1.2.1. Introduction IV.2.1.2.2. First Generation – Cautious Beginnings IV.2.1.2.3. Second Generation – Access to ICSID IV.2.1.2.4. Third Generation – ‘Any Dispute Concerning an Investment’ IV.2.1.2.5. Fourth Generation – Americanization IV.2.1.2.6. Comparative View – Last BRIC standing: Chinese exception to the restrictive turn IV.2.1.3. Investment Arbitration with Chinese Participation IV.2.1.3.1. Limited Arbitration Clauses – Interpretation and MFN Use IV.2.1.3.1.1. Broad or Narrow Interpretation IV.2.1.3.1.1.1. Tza Yap Shum v Republic of Peru (ICSID) IV.2.1.3.1.1.2. Ekran Berhad v People’s Republic of China (ICSID) IV.2.1.3.1.1.3. Sanum v Lao People’s Democratic Republic (ad hoc, PCA) IV.2.1.3.1.1.4. Beijing Urban v Republic of Yemen (ICSID) IV.2.1.3.1.1.5. China Heilongjiang v Mongolia (ad hoc, PCA) IV.2.1.3.1.1.6. Hela Schwarz GmbH v People’s Republic of China (ICSID) IV.2.1.3.1.1.7. Discussion IV.2.1.3.1.2. MFN Application to Procedural Provisions IV.2.1.3.1.2.1. Relevant case law IV.2.1.3.1.2.2. Discussion IV.2.1.3.2. Temporal Issues – Successive BITs and Time-limits IV.2.1.3.2.1. Ping An v Kingdom of Belgium (ICSID) IV.2.1.3.2.2. Ansung v People’s Republic of China (ICSID) IV.2.1.3.2.3. Discussion IV.2.1.3.3. Geographical Scope – Application of Chinese BITs to Hong Kong and Macao IV.2.1.3.3.1. Relevant case law IV.2.1.3.3.2. Discussion IV.2.1.3.4. Availability of the ICSID Convention to SOEs IV.2.1.3.4.1. Relevant case law IV.2.1.3.4.2. Discussion IV.2.1.4. Conclusions on China and Investment Arbitration IV.2.2. Phase Two – the PRC and the WTO DSM IV.2.2.1. China’s Accession to the WTO and the WTO DSM IV.2.2.2. DSM Case Law with Chinese Participation IV.2.2.2.1. China as a ‘rule-taker’ – November 2001 to February 2006 IV.2.2.2.1.1. China on the Complainant Side – Safeguard Measures IV.2.2.2.1.2. China on the Respondent Side – National Treatment IV.2.2.2.1.3. Conclusion IV.2.2.2.2. China as a ‘rule-shaker’ – March 2006 to August 2008 IV.2.2.2.2.1 China on the Complainant Side – Countervailing & Anti-Dumping Duties IV.2.2.2.2.2. China on the Respondent Side IV.2.2.2.2.2.1. National Treatment on Internal Taxation and Regulation IV.2.2.2.2.2.2. TRIPS & Censorship IV.2.2.2.2.2.3. GATT-GATS Relations & Systemic Position of the Accession Protocol IV.2.2.2.2.2.4. Settled Cases IV.2.2.2.2.3. Conclusion IV.2.2.2.3. China As a ‘Rule-Maker’ – Since September 2008 IV.2.2.2.3.1 Using the Accession Protocol Against China – Export Restrictions IV.2.2.2.3.1.1 Relevant case law IV.2.2.2.3.1.2 Discussion IV.2.2.2.3.2 Reversal of Obligations – Using the Accession Protocol in China’s Favor IV.2.2.2.3.2.1 Accession Protocol and Safeguards IV.2.2.2.3.2.1.1 Relevant case law: US-Tyres IV.2.2.2.3.2.1.2 Discussion IV.2.2.2.3.2.2 Accession Protocol and Anti-Dumping Duties IV.2.2.2.3.2.2.1 Relevant case law IV.2.2.2.3.2.2.2 Discussion IV.2.2.2.3.3 Double Remedies IV.2.2.2.3.3.1 Relevant case law IV.2.2.2.3.3.2 Discussion IV.2.2.2.3.4 Countervailing Duties IV.2.2.2.3.4.1 Relevant case law: US-Countervailing Measures (China) IV.2.2.2.3.4.2 Discussion IV.2.2.2.3.5 Anti-dumping Duties IV.2.2.2.3.5.1 Relevant case law IV.2.2.2.3.5.2 Discussion IV.2.2.2.3.6 Remaining Cases – National Treatment, MFN & Non-discriminatory Administration of Quantitative Restrictions IV.2.2.2.3.6.1 Relevant case law IV.2.2.2.3.6.2 Discussion IV.2.2.2.3.7 Cases at the Consultation Stage IV.2.2.2.3.8 Market Economy Status – ‘D-Day’ Gone Wrong & China’s Controlled Frustration IV.2.2.2.3.9 Conclusion IV.2.2.2.4. Comparative View – BRICS Lessons: Some Learn, Some Don’t IV.2.2.2.4.1. Introduction IV.2.2.2.4.2. Brazil IV.2.2.2.4.3. India IV.2.2.2.4.4. South Africa IV.2.2.2.4.5. Russia IV.2.2.2.4.6. Concluding Remarks on BRICS Experiences in the WTO DSM IV.2.2.2.5. Conclusion – China and the WTO DSM IV.3. Territory IV.3.1. Chinese Territory and the People’s Republic of China IV.3.1.1. Land Borders IV.3.1.2. Maritime Borders IV.3.2. Ongoing Territorial and Law of the Sea Disputes IV.3.2.1. South China Sea – Of Rocks and Frontiers IV.3.2.1.1. Background to the Dispute IV.3.2.1.2. Significance and Limits of Jurisdiction IV.3.2.1.3. Respective Claims and Legal Steps Taken IV.3.2.2. East China Sea – Same, Same, But Different IV.3.2.3. Sino-Indian Border Disputes – Himalayas from Kashmir to Arunachal Pradesh IV.3.3. Interactions With Dispute Settlement Bodies Below the Threshold of Contentious Proceedings IV.3.3.1. Advisory Proceedings IV.3.3.1.1. ICJ Advisory Opinion on Kosovo IV.3.3.1.2. ITLOS Advisory Opinion on Activities in the Area IV.3.3.1.3. ITLOS Advisory Opinion on Illegal Fishing IV.3.3.1.4. ICJ Advisory Opinion on Chagos IV.3.3.2. Engagement with the CLCS IV.3.4. The First Case – Philippines v China on the South China Sea IV.3.4.1. Background IV.3.4.2. Award on Jurisdiction and Admissibility IV.3.4.2.1. China’s Non-Participation IV.3.4.2.2. The Tribunal’s Jurisdiction IV.3.4.2.3. The Chinese Government’s Reaction IV.3.4.3. Award on the Merits IV.3.4.3.1 China’s Non-participation IV.3.4.3.2 Historic Rights and the Nine-Dash Line IV.3.4.3.3 Status of Maritime Features IV.3.4.3.3.1 Low-tide Elevations IV.3.4.3.3.2 ‘Islands’ or ‘Rocks’? IV.3.4.3.4 Lawfulness of Chinese Actions IV.3.4.3.5 Aggravation of the Dispute and Future Conduct IV.3.4.4. Implications and Aftermath IV.3.4.4.1. Political Reactions and Outlook IV.3.4.4.2. Criticism, Evaluation, and Legal Implications IV.3.4.4.2.1. Criticism Relating to Jurisdiction IV.3.4.4.2.2. Criticism Relating to the Merits IV.3.4.4.2.3. Criticism Relating to the International Rule of Law IV.3.4.4.2.4. Legal Implications IV.3.4.4.3. Conclusions – the Way(s) Forward IV.3.5. Comparative View – Last BRIC to Be Touched, Three Choices Ahead IV.3.5.1. The BRICS Experience – Stocktake and Comparison IV.3.5.2. Relevance for China’s Future Path IV.3.6. Conclusions – Territorial and Law of the Sea Disputes V. Perception – Academic Debates on Engagement with International Adjudication: Chinese International Law Scholars V.1. Introduction V.2. Economy V.2.1. Participation in the WTO DSM V.2.1.1. General Attitude – From Stockholm Syndrome to Confident Offense V.2.1.2. Criticism – Jurisdictional Issues, Protection of Developing States and Implementation V.2.1.2.1. General Points of Criticism V.2.1.2.2. Phase-Dependent Criticism – From Defense to Offense V.2.1.3. Policy Recommendations – The Art of War V.2.1.3.1. Observe, Study, Shape – General Approaches and Early Recommendations from the WTO Accession 2001 to 2006 V.2.1.3.1.1. Research, Training and Cautious Engagement V.2.1.3.1.2. Demonstrating Compliance V.2.1.3.1.3. Participating in Reform Negotiations V.2.1.3.1.4. Using China’s Position As a Developing State V.2.1.3.1.5. The Role of Individuals V.2.1.3.2. Engage, Defend, Shape – Recommendations Since the Shift to Active Participation in 2006 V.2.1.3.2.1. Confidence, Pragmatism and More Active Participation V.2.1.3.2.2. Continued NME Treatment and Chinese Responses V.2.2. Participation in Investment Arbitration V.2.2.1. General Attitude – March Towards Liberalism V.2.2.2. Criticism – Ambiguous Jurisdiction, Imbalances and ‘Legitimacy Crisis’ V.2.2.2.1. Supposed Ambiguities and Interpretation Issues V.2.2.2.2. Nature and Legitimacy of Investment Arbitration V.2.2.3. Recommendations – Identity Shift: From Host State to Home State V.2.2.3.1. Pre-Engagement – Chinese Views on International Investment Arbitration Ahead of the First Case in 2007 V.2.2.3.2. Walking a Tight Rope – Chinese Views on International Investment Arbitration as Threat and Protection from 2007 V.2.2.3.2.1. Research and Progress – Steady As She Goes V.2.2.3.2.2. Reforms and Influence – Making the Case V.2.2.3.2.3. Identity and Engagement – on What Has Changed V.2.3. Preliminary Conclusions V.3. Territory V.3.1. General Attitude – From Imperialist Oppressor to Guarantor of Peaceful Dispute Resolution V.3.2. Criticism – The Roots of Caution V.3.2.1. General Criticism – Surprising Similarities V.3.2.2. The South China Sea Arbitration – Recent Flare-up V.3.2.2.1. General Criticism and Jurisdictional Matters V.3.2.2.2. Criticism on the Merits V.3.3. Policy Recommendations – How to Tame a Dragon V.3.3.1. General Recommendations – Prepare Yourself and the Arena V.3.3.1.1. Master the Rules – Research & Training V.3.3.1.2. Have a Seat at the Table – Reform & Influence V.3.3.2. Recommendations on Engagement – A Contested Field V.3.3.2.1. Negotiations & Joint Development V.3.3.2.2. Adjudication & Arbitration V.3.3.2.2.1. Criticism of Political Declarations, Negotiations & Joint Development V.3.3.2.2.2. General Preconditions for and Significance of Engagement V.3.3.2.2.3. Engaging to Refute Jurisdiction V.3.3.2.2.4. Advisory Opinions V.3.3.2.2.5. Trial Balloons: Conciliation, Arbitration & Adjudication – New Mechanisms & Special Separate Tribunals V.3.3.2.2.6. Full Embrace – Tackling the Issues Head On V.3.4. Preliminary Conclusions VI. Conclusion – China’s Behavior in International Adjudication VI.1. Imperatives of Greatness – of What ‘Has to Be Done’ VI.2. China and International Adjudication – Different Speeds, Same Direction VI.2.1. Round One – Trade Law VI.2.2. Round Two – Investment Law VI.2.3. Round Three – Law of the Sea and Territorial Disputes VI.3. Comparison and Outlook VI.3.1. A Chinese Path – Not Your Ordinary BRIC VI.3.2. The Way Forward – Engaging to Rise References