The Future of Investor-State Dispute Settlement in the EU-China Comprehensive Agreement on Investment

This chapter intends to explore the future of the ISDS provisions in the CAI. Contrary to the dominant view that it is unlikely for China to be a supporter of the EU’s ISDS reform proposal, this chapter argue that such a conclusion may be premature. After a careful analysis of China’s submission to the UNITRAL Working Group III, the key feature of EU’s ICS, and a systemic evaluation of pertinent factors that are most relevant to China’s approach to ISDS reform, it is submitted that the divergence between the approaches to ISDS reform of the EU and China may not be unbridgeable. It is possible for China to agree to a two-tier ICS in the CAI, as the EU has concluded with other countries. Similarly, there are no strong reasons for China to oppose the EU’s MIC proposal, in particular after the EU indicated that the MIC proposal could take an open architecture.