The Issue of SOEs: Perspectives of AIIB and Other Institutions

The treatment standards of state-owned enterprises (SOEs) as public entities have far-reaching and significant implications against the background of China’s rise and the reform of global economic governance. The relevant standards have been abundantly debated and tested in three areas of international economic law: international financial law, represented by AIIB and other multilateral development banks; international investment law, represented by law of the International Centre for Settlement of Investment Disputes; and international trade law, represented by law of the World Trade Organization. After reviewing those areas of international law, the chapter concludes that a function-based approach has generally been observed in conducting the relevant examination, but some deviations, featuring an ownership-based approach, do exist. This finding is meaningful for the development of future international law, as well as for China’s domestic SOE reform. Broadly, it is instructive on whether China’s unique economic system, guided by a strong government, will be accepted by the international community, and if yes on what condition.