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The EU-China BIT Negotiation and the Position of Chinese SOEs as Investors 欧盟-中国双边投资条约的谈判以及中国国有企业作为投资者的身份

  • China
  • Hong Kong
  • Europe
  • Investment funds and asset management
  • Investment treaty arbitration



Chinese foreign direct investment (FDI) led by Chinese state owned enterprises (SOEs) in the European Union (EU) has increased by almost 50 times in recent years, from less than EUR 700 million in 2008 to a record high of EUR 35 billion in 20161. Although outbound Chinese FDI has declined slightly in recent years due to the tightened scrutiny by the Chinese Government, the EU remains one of the most important destinations for outbound Chinese investors. In light of the volume of FDI flows between the EU and China, the parties launched the EU-China bilateral investment agreement (BIT)2 negotiations in 2013. Following seven years of negotiations, it appears that the parties agree “in principle” to the BIT and are committed to conclude the talks by the end of 20203.

As SOEs account for a substantial percentage of Chinese FDI in the EU4, the standing of Chinese SOEs as “investors” defined in the text of the BIT is likely to be a contentious topic that will govern whether Chinese SOEs would have standing to bring claims under the EU-China BIT.

Current case law suggests that if SOEs are acting on a purely commercial basis and not discharging governmental functions, they are generally given standing (as claimant investors) under the terms of existing BITs, although they could potentially be denied standing if they do not act in this manner. Therefore, unless specific wider wording is agreed in the EU-China BIT to cover the activities of Chinese SOEs, the possibility of Chinese SOEs gaining protection under BITs could potentially be at risk if they are seen as discharging government functions by way of their foreign investments into EU jurisdictions.

In this e-bulletin, we discuss the evolution of the treatment of SOEs in Chinese BITs and two cases involving Chinese SOEs as claimants seeking BIT protection. We also examine the possible treatment of Chinese SOEs under the prospective EU-China BIT.

What is a BIT?

A BIT is an international treaty or agreement between two governments where each State undertakes to promote and protect the private investments made by nationals of the other State in its territory. The intention is to promote FDI between the States, by ensuring that foreign investors coming into each State benefit from protections offered by the host government. Usually, BITs provide the foreign private investors with benefits such as, among others, a guarantee of fair and equitable treatment, non-discriminatory treatment in the same manner that local investors or other foreign investors receive, adequate compensation in the event of expropriation, guaranteed transferability of investment-related funds and, crucially, the option for the private investor to commence international arbitration against the host government if the promised protection is not provided. BITs are a key element of foreign investment protection for private investors.

When structuring overseas investments, we would usually recommend outbound foreign investors to take into consideration whether a BIT is available between the investor’s home country and the investment destination country. If there is none, it is suggested to consider whether the investment could be restructured through a third country which has a BIT in place with the target jurisdiction, in order to gain protection under the third country’s BIT, in a similar manner to efficient tax structuring.

Background to the EU-China BIT Negotiation

The EU-China BIT seeks to replace the existing 25 BITs signed between China and individual EU Member States with a unified agreement at the EU level. The aim of the EU-China BIT is to provide investors on both sides with predictable, long-term access to the EU and Chinese markets and to protect investors and their investments. Although the text proposals for the EU-China BIT are not in the public domain, it appears that the BIT will also contain rules on handling SOEs in investor-state disputes5.

Current Treatment of SOEs under China’s BITs

China signed its first BIT with Sweden in 1982. These early BITs were basic and more focused on investment promotion rather than investor protection, given that China at the time was a capital importer. However, as China’s economy evolved gradually from a capital importer to a capital exporter, China began to pursue stronger legal protections for its overseas investments.

The early BITs of China were usually silent as to whether SOEs would be included within the meaning of an “investor”. For example, in the China-Sri Lanka BIT (signed in 1986), a “company” in respect of China means any “company or other juridical person” incorporated or constituted and having its seat in its territory in accordance with its laws, and in the China-Germany BIT (signed in 2003), “investor” in respect of China means “economic entities” incorporated under the laws and regulation of and with their seats in China.

Subsequently, in the China-Canada BIT signed in 2012, the meaning of “investor” was expanded to include “any entity” constituted or organized in accordance with the laws of a contracting party. More recently, in the China-Tanzania BIT (signed in 2013), “investor” in respect of China means “any entity … irrespective of whether it is owned or controlled by a private person or the government”. Similar definitions with express inclusion of SOEs can also be found in the Free Trade Agreements between China and Australia / South Korea (both signed in 2015) and the recently concluded Regional Comprehensive Economic Partnership Agreement (2020) including China and other Asian and Asia-Pacific countries.

Treatment of Chinese SOEs in Recent Investor-State Disputes

Respondent States have occasionally raised jurisdictional objections and questioned the standing of SOEs as claimants, on the basis that the SOE was either acting as an agent for their government, or discharging an essentially governmental function. In other words, host States have complained that the SOE was not acting as a private investor and therefore should not have standing under the BIT which was intended to encourage private (rather than government-based) FDI, but was effectively acting as an agent/entity of its home Government and therefore should not have access to BIT protections. This is particularly relevant for Chinese SOEs given their increasingly important role in international investment, particularly in the context of the “Belt and Road Initiative” led projects.

Where a BIT expressly includes or excludes SOEs in the definition of an “investor”, the question of standing is straight-forward (for example, see the China-Tanzania BIT discussed above). The difficulty arises where the BIT is silent as to whether an SOE falls within the definition of “investor”, which gives the respondent State the opportunity to make a challenge. However, two decisions, both involving Chinese SOEs, provide useful guidance on this issue.

In Beijing Urban Construction Group Co Ltd v Republic of Yemen6, the Chinese SOE claimant, a contractor for an international airport project in Yemen, submitted a claim that Yemeni authorities had deprived it of its investment by employing military and security forces to assault its employees and denying access to the construction site.

Yemen argued that the claimant, as an SOE, did not have standing to bring the claim because it failed to qualify as a “national of another Contracting State” under Article 25(1) of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States 1966 (the “ICSID Convention”). Yemen asserted that the Chinese Government was the ultimate decision maker for the claimant, and therefore the claimant should not be permitted to benefit from a BIT which was intended to protect private (rather than governmental) Chinese investment into Yemen. The claimant contended that this was inevitable because similar structures existed in many Chinese SOEs given the socialist system in China and the majority of the SOEs reflected the Government’s policies.

The arbitral tribunal accepted that the claimant company was an SOE, but found its corporate structure and ultimate ownership to be irrelevant. The tribunal considered the nature of the claimant’s activities, which were commercial, rather than their purpose (which Yemen argued was ultimately governmental). The tribunal concluded that the claimant in this case was neither acting as an agent nor fulfilling Chinese governmental functions within the territory of the respondent State.

In China Heilongjiang and others v Mongolia7, the claimants (a consortium including two Chinese SOEs) brought proceedings against the respondent State Mongolia for revoking their mining license.

Mongolia challenged the tribunal’s jurisdiction on the basis that the claimants did not qualify as an “investor” within the meaning of Article 1(2) of the China-Mongolia BIT which requires investors to be “economic entities” established in accordance with the laws of China and domiciled in China. Mongolia argued that the claimants were not motivated to make a profit and did not function with sufficient independence from their owner, the Chinese government. Instead, the claimants were alleged to be quasi-instrumentalities of the Chinese government and serve to achieve China’s foreign policy goals.

The tribunal rejected Mongolia's arguments on the basis that: (a) there was no express prohibition in the BIT denying protection to SOEs; (b) there was no basis in the BIT to impose restrictions on investors based on their organization, business purpose, ownership or control, and the fact that China directly or indirectly controlled the claimants had no relevance for the purpose of their qualification as “economic entities”; and (c) there was no evidence that the claimants acted to achieve China’s political goals.

Key Takeaways

The above cases are examples of arbitral tribunals addressing the presence of Chinese SOEs in BIT arbitrations, and resolving objections by host States that the claimant SOE is not a private entity but rather is making its FDI investment for purposes of advancing Chinese government policy. It is not yet clear whether China and EU will include specific wording addressing this issue in the EU-China BIT. Key takeaways include:

  • Chinese SOEs would be well placed to structure their foreign investments to place them in the best position to claim protection under BITs. Depending on the nature of the investment, an SOE may potentially be required to prove that it falls within the definition of “investor”;
  • The Beijing Urban and China Heilongjiang cases suggest that, provided the nature of the activities of the relevant SOE are on their face “commercial” to some extent, tribunals may be unwilling to deny claimant SOEs the protection available under BITs. However this depends on the specific wording of the relevant BIT;
  • Chinese SOEs with complicated legal structures should be aware of challenges they may face in their foreign investment activities and in bringing claims before investor-state tribunals. They should keep in mind their combined characteristics and the importance of drawing a distinction between their commercial activities and State-owned identity; and
  • We would expect Chinese negotiators to push for the express inclusion of SOEs within the terms of the potential EU-China BIT, although it is not clear whether this would be accepted by the EU negotiators. On the EU side, its recent BITs signed with Vietnam, Japan and Singapore respectively also expressly include SOEs. However, given the differences in political ideology and the role of SOEs between countries, it remains to be seen whether the EU will accept an unconditional and express inclusion of SOEs in the EU-China BIT, or if accepted whether there may be some limitation on the nature of their investment activities.


近年来,由中国国有企业主导、中国向欧盟进行的外国直接投资数额增长近50倍,从2008年的不足7亿欧元,到2016年创历史最高的350亿欧元8。最近几年,由于中国政府监管力度加强,中国对外直接投资数额有所下滑,但欧盟仍是中国最主要的投资目的地之一。鉴于相互间巨大的投资体量,中国和欧盟在2013年启动了欧盟-中国双边投资条约的谈判9。有报道称,在七年的谈判过后,双方已 “原则上” 就条约达成一致,并致力于在2020年年底前完成谈判10

中国国有企业在中国对欧盟的外国直接投资中贡献了很高的份额11,因此,如何在条约中明确中国国有企业是否构成 “投资者” 很可能成为中欧双方谈判的焦点,这也将进一步影响中国国有企业是否有资格在欧盟-中国双边投资条约下作为投资者提出索赔。










中国早先签署的双边投资条约通常未明确规定国有企业是否应当被认定为 “投资者”。例如,在中国与斯里兰卡在1986年签署的双边投资条约中,中国的 “公司” 被定义为根据其法律在其领土内组成或设立并具有住所的 “公司或其他法人”;中国与德国在2003年签署的双边投资条约规定,中国的“投资者”包含根据中国法律法规在中国领土内设立的 “经济实体”。

随后,中国与加拿大在2012年签署的双边投资条约扩展了 “投资者” 的含义,包含了根据缔约国法律组成或组织的 “任何实体”。中国与坦桑尼亚在2013年签署的双边投资条约则规定,中国的 “投资者” 包含了 “任何实体……不论是否由私人或政府所拥有或控制”。中国在2015年分别与澳大利亚和韩国签署的自由贸易协议以及在2020年与亚太地区十四个国家共同签署的《区域全面经济伙伴关系协定》也采用了与此类似的明确包含国有企业的定义。


作为被主张方的国家(以下简称“被告国”)可能会提出管辖权异议,并质疑国有企业作为主张方的诉讼地位,理由是国有企业或是作为其本国政府的代理人行事、或是履行实质为政府职能的行为。换言之,被告国曾提出,国有企业并非私人投资者,因此不应被认定为旨在鼓励私人(而非政府)外国直接投资的双边投资条约所保护的对象;相反的,国有企业作为其本国政府的代理人或政府实体,不应获得双边投资条约的保护。鉴于中国国有企业在国际投资中扮演着越来越重要的角色,尤其是在 “一带一路” 倡议主导的项目背景下,这一点尤为重要。

如一份双边投资条约对 “投资者” 的定义中明确包括或排除国有企业,则该等地位认定问题是直截了当的(例如,见前述中国-坦桑尼亚双边投资条约)。当双边投资条约对国有企业是否属于 “投资者” 的定义未有明确规定时,认定国有企业的地位将存在困难,且被告国也有了提出质疑的机会。然而,以下两项涉及中国国有企业的决定在这一问题上提供了指导。


也门辩称,索赔方作为中国国有企业,没有资格提出这一索赔主张,理由是根据1966年《关于解决国家与其他国家国民之间投资争端的公约》(即ICSID公约)第25(1)条,索赔方没有资格成为 “另一缔约国国民”。也门声称,中国政府是索赔方的最终决策者,因此不应允许索赔方从旨在保护中国私人(而非政府)对也门的投资的双边投资条约中获益。索赔方辩称,鉴于中国的社会主义制度,中国政府作为国有企业的最终决策者是不可避免的,许多中国国有企业都存在类似的结构,且大多数国有企业都反映了政府的政策。



蒙古国对仲裁庭的管辖权提出了质疑,理由是索赔方不构成中蒙间双边投资条约第1(2)条所定义的 “投资者”,该条要求投资者是依照中国法律设立且住所在中国领土内的 “经济实体”。蒙古国辩称,索赔方没有盈利的动机,也并非充分独立于其所有者(即中国政府)运营;相反的,蒙古国称索赔方是中国政府的 “准工具”,为实现中国的外交政策的目标服务。




  • 中国国有企业应更好的构建其对外投资结构,使自身处于最有利的地位,能够根据双边投资条约要求东道国提供保护。根据投资的性质,国有企业可能被要求证明其属于 “投资者” 的定义范围;
  • 北京城建一案和中国黑龙江一案表明,如果相关国有企业行为的性质在某种程度上是 “商业性” 的,仲裁庭可能倾向于不会拒绝国有企业根据双边投资条约要求保护。但是,这也取决于相关双边投资条约的具体条款;
  • 法律结构复杂的中国国有企业应认识到自身在对外投资时和在作为投资者向政府提出的索赔时可能面临的挑战。中国国有企业应牢记其综合性的特征,而能够明确区分自身的商业行为和国有特性是至关重要的;以及
  • 我们预计,中国的谈判代表应当会推动将国有企业明确纳入欧盟-中国双边投资条约的条款中,尽管目前尚不清楚欧盟的谈判代表是否会接受这一点。在欧盟方面,其最近分别与越南、日本和新加坡签署的双边投资条约均明确包括了国有企业。然而,鉴于各国在政治意识形态和国有企业角色上的差异,欧盟是否会接受无条件地、明确地将国有企业纳入欧盟-中国双边投资条约中,或者即使接受,国有企业投资行为的性质是否会受到任何限制,仍有待观察。

EU-CHINA FDI: Working Towards Reciprocity in Investment Relations by Thilo Hanemann, Rhodium Group And Mikko Huotari, Mercator Institute For China Studies. 

Officially referred to as the “Comprehensive Investment Agreement”.

4 For example, State-owned investors accounted for about half of total deal value in 3Q 2020 of Chinese FDI in EU; 

5 Of the 34 rounds of negotiations between the parties since 2013, several rounds have focussed on rules relating to SOEs. For example, see the “Reports of negotiating rounds” 15 and 24 – 31 at See also

6 ICSID Case No ARB/14/30, a case under the China-Yemen BIT signed in 1998. See paragraphs 40 and 43 of the Decision on Jurisdiction dated 31 May 2017.

7 PCA Case No 2010-20, a case under the China-Mongolia BIT signed in 1991. See paragraphs 415 – 418 of the Award dated 30 June 2017.

8《欧盟-中国外国直接投资:向互惠互利投资关系前进》(EU-CHINA FDI: Working Towards Reciprocity in Investment Relations),作者:Thilo Hanemann和Mikko Huotari,德国墨卡托中国研究中心(Mercator Institute For China Studies)。

9 官方将此条约称为《中欧全面投资协定》。

10  请参见:以及

11 例如,在2020年第三季度,国有企业贡献了中国对欧盟的投资大约一半的份额,请参见:

12 在中欧双方自2013年开始进行的34轮谈判中,有数轮的重点是有关国有企业的规定。例如,第15轮和第24-31轮的谈判报告都体现了此项重点(请参见。

13 国际投资争端解决中心案例编号ARB/14/30。本案依据中国与也门在1998年签署的双边投资条约进行。请参见日期为2017年5月31日的有关管辖权的决定的第40和43段。

14 常设仲裁法院案例编号2010-20。本案依据中国与蒙古在1991年签署的双边投资条约进行。请参见日期为2017年6月30日的判决的第415至418段