Asia-Pacific FDI Forum II
The past meetings of the Asia-Pacific FDI Forum have observed discussions on a wide variety of themes including faring APAC’s agreements with global trends in other foreign nations which gathers momentum from both policy and academic perspectives so as to have comprehensive knowledge and understanding, wave of regionalization in rule-making, complementary nature of Chinese bilateral, regional and multilateral initiatives, economic and legal consequences of the China-European Union Bilateral Investment Treaty (BIT) and legal and regulatory framework governing operations of SEZs and possible violations of World Trade Organization (WTO) laws.
As China was experiencing a & painful and treacherous & (as recounted by Premier Li Keqiang in a speech at the World Economic Forum 2015) economic transition from state-led manufacturing to a service-based economy, new strategies were being discussed to fuel its stalled economic reforms and development goals (as articulated in China & 13th Five-Year- Plan (2016-2020)). For China & domestic investors, the investment pool was shrinking especially when compared with its very high savings rate. According to the World Bank`s Ease of Doing Business Index, which measures business-friendly regulations, China was ranked 84 in 2015. China came after Ukraine which was ranked at 83. It was therefore important for China to realign its investment rules and policies with its major economic partners and within the greater APAC region so as to nudge this scale in their favor.
The Asia-Pacific FDI Forum II, took place in 2016. It was structured around three tracks of China & emerging investment policy and strategy.
- The Bilateral Prong: In recent years, China (a country which has historically preferred to deal bilaterally with foreign nations), possibly to advance its interests and gain more influence in the process has entered into a series of bilateral talks with its high-income trading partners. China concluded bilateral deals with certain strategic partners e.g. ASEAN (2009), Canada (2012), and Australia (2015). Furthermore, the US-China BIT which governed a more complex economic relationship between the world`s two largest economies was launched in 2008. Additionally, the EU and China investment treaty (launched in 2013 at the 16th EU-China Summit) encouraged further liberalization of the Chinese economy and contributed towards China’s propaganda of gaining greater economic influence globally.
- The Regional Prong: China has actively participated in shaping the economic architecture of the APAC region. Spurred by regional economic integration in the West (EU, NAFTA, MERCOSUR, Pacific Alliance) and frustrated by the deadlock at the WTO, countries in the APAC region have leaned towards harmonization and
modernization of their foreign investment rules. To fulfil the & Asia-Pacific dream & touted by President Xi, China has, since 2006, been promoting an Asia-Pacific trade pact, Free Trade Area of Asia Pacific (FTAAP), the Regional Comprehensive Economic Partnership (RCEP) and the Trans Pacific Partnership (TPP) as pathways
towards harmonization. In 2014, a level of harmonization was achieved in East Asia as China-Japan-Korea
Trilateral Investment Agreement was entered into force. And of course, the potential of the TPP (now the Comprehensive and Progressive Agreement for Trans-Pacific Partnership), even without having China, must be a part of this analysis, as it had complex and significant impact on the region & investment governance regime.
- The Global Prong: Aimed at strengthening its & Go Global & policy by opening up new markets and increasing the value of cross-border business, China has garnered some serious attention through its introduction of the One Belt One Road (OBOR) in 2013. The OBOR followed China`s G20 Presidency in 2016, when a multilateral consensus has been reached on Global Investment Policymaking, with a sharp focus on inclusive growth and sustainable development.
The Asia-Pacific FDI Forum II’s overarching topic was whether the aforementioned three emerging tracks of China & investment policy and strategy are complimentary or in competition. This discussion also allowed participants to understand China & approach with Investor-State Dispute Settlement (ISDS), its experience with incorporating historical investment treaty concepts such as customary international law, and its journey from being a net capital importer to an active capital exporter which is also reflected in its treaty practice (post and pre-establishment, negative list approach).