https://orcid.org/0000-0001-5625-3419
![Sample our Law journals, sign in here to start your FREE access for 14 days]({"type":"image" , "src" : "/sda/5942/TOC-Subject-Sample-2021-Law.jpg"})
ABSTRACT
This article looks at the dispute settlement mechanism of the Belt and Road Initiative (BRI) between China and Central Asian Countries in economic cooperation. By reviewing the main features of Central Asia’s geoeconomics and geopolitics and the status quo of trade and investment with China, this article analyses the key areas of cooperation under the BRI where disputes have occurred and are likely to occur in the future, as well as the shortcomings of existing dispute resolution methods. By comparing the regulations of competing dispute settlement arrangements, this article explores how to improve the dispute settlement mechanism between China and Central Asian countries under the BRI.
Acknowledgements
We would like to thank Jiangyu Wang for his insightful comments on several drafts of this article. We would like to thank three anonymous reviewers for their very helpful comments.
Notes
1 See Ministry of Foreign Affairs of the People’s Republic of China, Speech by Chinese President Xi Jinping in Nazarbayev University (8 September 2013) <www.fmprc.gov.cn/web/ziliao_674904/zyjh_674906/t1074151.shtml> accessed 1 June 2020.
2 See Ministry of Foreign Affairs of China, Speech by Chinese President Xi Jinping to Indonesian Parliament (3 October 2013) <www.fmprc.gov.cn/web/ziliao_674904/zyjh_674906/t1084354.shtml> accessed 1 June 2020.
3 It is entirely unclear why, and on what basis, particular countries are regarded as BRI countries. However, it must be understood as a label for China’s global ambitions and outreach activities. BRI is not just a project planning to ‘enhancing connectivity of Asian, European and African continents and their adjacent seas’ and build colossal infrastructure joining the Asia, Europe and Africa with each other or increase investment in the countries along the BRI route, which is more like a comprehensive global plan that has been expanded to Latin America, the Caribbean, Africa, even Arctic, outer space. By the end of July 2019, the Chinese government has signed 195 intergovernmental cooperation agreements with 136 countries and 30 international organizations. As one of President Xi’s most important foreign policies, it is noteworthy where the BRI was announced, as Kazakhstan and Indonesia are both developing countries with relatively lower international profile. It suggests that how much China values Kazakhstan as well as the broader Central Asian region. As for Indonesia, who is the first one proposed the Global Maritime Fulcrum vision, which is consistent with China’s Trans-Pacific Partnership and 21st Century Ocean Strategy. Additionally, Indonesia is also the largest economy in the Association of Southeast Asian Nations (ASEAN) which serves as a bridge connecting China to Southeast Asia, South Asia, the Indian Ocean, and the China-Indochina Peninsula Corridor sea route (China–South China Sea–Indian Ocean–Europe). Lutz-Christian Wolff, ‘Legal Responses to China’s “Belt and Road” Initiative: Necessary, Possible or Pointless Exercise?’ (2020) 29 Transnational Law and Contemporary problems 250;Yuejiao Zhang, ‘Belt and Road Initiate-Navigating New Challenges and Opportunities’ in Julien Chaisse and Jędrzej Górski (eds), The Belt and Road Initiative: Law, Economics, and Politics (Brill, 2018) Foreword; Sufian Jusoh, ‘The Impact of BRI on Trade and Investment in ASEAN’ in CIMB ASEAN Research Institute, China’s Belt and Road Initiative (BRI) and Southeast Asia (2018) <www.lse.ac.uk/ideas/Assets/Documents/reports/LSE-IDEAS-China-SEA-BRI.pdf> accessed 1 June 2020; ‘A Report Card of the BRI in Its Six Years’ (‘图解: 一带一路六年成绩单’) (9 September 2019) <www.yidaiyilu.gov.cn/xwzx/gnxw/102792.htm> accessed 1 June 2020.
4 A case in point is Kazakhstan government published a list of the BRI projects with Chinese investment under domestic public pressure in September 2019 without any further details. Previously, the government of Kazakhstan had refused to disclose project details to environmentalists and international policy experts on the grounds of business sensitivity. See Eugene Simonov, ‘Half China’s Investment in Kazakhstan is in Oil and Gas’ (29 October 2019) <https://chinadialogue.net/en/energy/11613-half-china-s-investment-in-kazakhstan-is-in-oil-and-gas-2/> accessed 2 June 2020.
5 BRI is considered as a partnership-based, relational approach rather than a rule-based system. See Jiangyu Wang, ‘China’s Governance Approach to the Belt and Road Initiative (BRI): Relations, Partnership, and Law’ (2019) 14 Global Trade and Customs Journal 222.
6 On the one hand, the legal environment in China and Central Asian countries has not formed a pattern to the law to resolve disputes; on the other hand, the uncertainty and obsolescence of the existing dispute resolution methods have also confused the infringed partners.
7 China is seeking to build the ‘One-stop’ Diversified International Commercial Dispute Resolution Mechanism. Since Singapore International Commercial Court (SICC) and Astana International Financial Centre Court (AIFC Court) are the main competitors on resolving disputes over the BRI in Central Asia, the comparative study of CICC, SICC and AIFC Court is an essential research for locating the deficiencies of CICC in institutional design and improving the existing disputes settlement mechanisms between China and Central Asian countries under BRI. Herein it will not be discussed in detail due to the word limit.
8 ‘Several Opinions on Improving the Arbitration System and Increasing the Credibility of Arbitration’ was issued on 31 December 2018 by General Office of the Central Committee of the Communist Party of China (General Office, CCCPC) and General Office of the State Council. The Xi’an Arbitration Commission took the lead of 14 arbitration institutions and scientific research institutions in China to jointly initiate the ‘“One Belt One Road” Arbitration Service Cooperation Mechanism Construction Initiative’ in April 2019, see <www.chinalaw.gov.cn/Department/content/2019-05/07/612_234528.html> accessed 3 June 2020; China International Economic and Trade Arbitration Commission, ICC International Court of Arbitration, German Arbitration Institute, Hong Kong International Arbitration Centre, Arbitration Institute of the Stockholm Chamber of Commerce, and the Singapore International Arbitration Centre and other 42 arbitration institutes, jointly issued the ‘Beijing Joint Declaration on “One Belt One Road”’ on 12 November 2019, which aims to strengthen the cooperation between arbitration institutes under BRI, see <http://tradeinservices.mofcom.gov.cn/article/news/gnxw/201911/93932.html> accessed 3 June 2020.
9 Although the vast majority of studies have limited Central Asia to the 5 countries as the article says, proving that this criterion has won the majority of consent. But there is still a lack of consensus on the definition of Central Asia, for UNESCO’s view, apart from 5 counties, Afghanistan, Mongolia, western China and several parts of Pakistan, Iran and India also belong to Central Asia. See MS Asimov, ‘Description of the Project’ in MS Asimov and CE Bosworth (eds), History of Civilizations of Central Asia (Motilal Banarsidass, 2001) 11; Hafeez Malik, ‘Central Asia's Geopolitical Significance and Problems of Independence’ in Hafeez Malik (ed), Central Asia: Its Strategic Importance and Future Prospects (St. Martin’s Press, 1994)
10 Rafael Kandiyotti, Pipelines: Flowing Oil and Crude Politics (I.B. Tauris, 2008) 76.
11 Geopoliticians have recognized the geopolitical and geostrategic importance of the Eurasia from the beginning of the twentieth century. Halford John Mackinder emphasized that the Eurasian continent (mainly Russia and Central Asia) as the ‘geographical pivot of history’, or ‘Heartland’ and confirmed ‘whoever controlled it would wield enormous power in the world’. Ehsan Ahrari narrowed the ‘Heartland’ to Central Asia. Sarah O’Hara described the competition of external powers in Central Asia is the fight for the world dominance. Matthew Edwards considered Central Asia as ‘a key piece on the chess table of world power’. Zbigniew Brzezinski indicated that ‘the primacy of America is highly dependent on its success in maintaining political, economic, and military dominance over the Eurasian supercontinent’. These theories have heavily influenced the assessment of the strategic position of Eurasia by Western policymakers and scholars in the following decades. Of course, we must be clear that the critical examination should be applied to these theories due to each scholar’s particular position and dogmatic cognition which may have become out of date in light of the current geopolitical and global economic realities. Paulo Duarte, ‘Central Asia: The Planet’s Pivot Area’ (2014) 9 Revista de Relaciones Internacionales, Estrategia y Seguridad <www.scielo.org.co/scielo.php?script=sci_arttext&pid=S1909-30632014000100002> accessed 3 June 2020; Halford John Mackinder, ‘The Geographical Pivot of History’ (1904) 170 The Geographical Journal 298; Ehsan Ahrari, ‘The Strategic Future of Central Asia: A View from Washington’ (2003) 56 Journal of International Affairs 159; Sarah O’Hara, ‘Great Game or Grubby Game? The Struggle for Control of the Caspian’ (2004) 9 Geopolitics 147; Matthew Edwards, ‘The New Great Game and the New Great Gamers: Disciples of Kipling and Mackinder’ (2010) 22 Central Asian Survey 83; Zbigniew Brzezinski, The Grand Chessboard: American Primacy and Its Geostrategic Imperatives (Basic Books, 1997) 47; Emre Erşen, ‘Rise of New Centres of Power in Eurasia: Implications for Turkish Foreign Policy’ (2014) 5 Journal of Eurasian Studies 184.
12 Levent Hekimoglu, ‘Whither Heartland? Central Asia, Geography and Globalization’ (2005) 34 Central Asia and the Caucasus (special issue) 66; Wayne McLean, ‘Authoritarianism, Energy and Ideas in Central Asia: From Politics and Pipelines to Foreign Policy’ in Matthew Sussex and Roger E Kanet (eds), Russia, Eurasia and the New Geopolitics of Energy (Palgrave Macmillan, 2015) 166.
13 Paul Stronski, ‘Turkmenistan at Twenty-Five: The High Price of Authoritarianism’ <https://carnegieendowment.org/2017/01/30/turkmenistan-at-twenty-five-high-price-of-authoritarianism-pub-67839> accessed 5 June 2020.
14 The Central Asian countries were economic laggards during the Soviet Union. The economic structure was distorted and heavily depended on exporting raw materials. The politics did not change much when the Soviet system collapsed. The political trajectories of central Asia were profoundly affected by clan politics, especially the control of economic resources by the main clans. As a result, a series of reform policies have been either limited or failed. See Ruisi Li, ‘Analysis of the Recent Economic Situation in Central Asia and Its Impact on China under the Background of One Belt and One Road’ (‘“一带一路”背景下中亚地区近期经济形势及对我国影响分析’) (2020) 2 The Northern Forum (《北方论丛》) 23; Clan is identity based on kin or fictive kin, clan politics refer to competitions and deals between clans for clan interests. The states conditions of transitional and post-transitional in Central Asia facilitated the clans to gain power in post-Soviet era. Kathleen Collins, ‘The Logic of Clan Evidence from the Central Asia Trajectories’ (2004) 56 World Politics 224; Specifically, Small-scale privatization and price liberalization policies implemented in Uzbekistan, Kazakhstan and Kyrgyzstan did not achieve the ideal effect, let alone there was basically no progress in restructuring enterprises, developing competition policies, reforming banks, and building infrastructures. Manuel Stark and Joachim Ahrens, ‘Economic Reform and Institutional Change in Central Asia: Towards a New Model of the Developmental State?’ (2012) Forschungspapiere Research Papers 19.
15 For instance, FDI Attractiveness Index, FDI Confidence Index and Index of Economic Freedom. In the eyes of investors, the five Central Asian countries share a patriarchal nature to their political regimes and desperate to attract foreign investment. They are committed to maintain the status quo since potential transformation of political and social structures may lead to the loss or weakening of their power. Luba Azarch, ‘Central Asia and the European Union: Prospects of an Energy Partnership’ (2009) 7 China and Eurasia Forum Quarterly Journal 55.
16 Since 1997, The President of Kazakhstan has delivered a State of the nation address every year, for example, ‘Prosperity, Security and Ever Growing Welfare of all the Kazakhstanis’ in 1997, which was called ‘Kazakhstan-2030’, presented 7 priorities: national security, domestic political stability and consolidation of the society, economic growth based on an open market economy with high level of foreign investments and internal savings, health, education and well-being of citizens, power resources, infrastructure, more particularly transport and communication, professional state. In 2012, Addressed ‘Strategy Kazakhstan-2050: New Political Course of the Established State’, ‘New Opportunity under the Forth Industrial Revolution’ in 2018, and ‘Constructive Public Dialogue – The Basis of Stability and Prosperity of Kazakhstan’ in 2019. See Office Site of the President of the Republic of Kazakhstan, ‘The Strategy for Development of the Republic of Kazakhstan’ <www.akorda.kz/en/official_documents/strategies_and_programs>; State of the National Address <www.akorda.kz/en/addresses/addresses_of_president> accessed 6 June 2020. Uzbekistan has issued a market-oriented Program reform since 2017, which has been supported by WBG to become an industrialized, high-middle-income country, specific measures include accelerating the development of production, improving industrial structure, and promoting economic liberalization and product exports. See ‘Uzbekistan: On the Path to High-Middle-Income Status by 2030’ (2016) <www.worldbank.org/en/results/2016/04/13/uzbekistan-on-the-path-to-high-middle-income-status-by-2050> accessed 6 June 2020. Turkmenistan has strengthened its share of industrial products in the international market and encouraged natural gas exports, for this purpose, jointly built the Turkmenistan-Afghanistan-Pakistan-India pipeline and the Trans-Caspian Natural Gas pipeline with China. <http://tdh.gov.tm/news/en/articles.aspx&article11744&cat26> accessed 6 June 2020. Tajikistan issued ‘National Development Strategy of the Republic of Tajikistan for the Period up to 2030’ and determined the priority development directions in the 5 national economic fields of energy, transportation, industry, agriculture and finance. <https://nafaka.tj/images/zakoni/new/strategiya_2030_en.pdf> accessed 6 June 2020. The President of Kyrgyzstan proposed in 2018 to commit to building a clean and fair society, eradicating corruption, and improving the investment environment and transportation construction.
17 Especially after the second half of 2016, the economic situation in Central Asia has improved significantly. Although the economic growth in Central Asia has slowed down since 2018 affected by the fall in oil prices and the slowdown in growth in the Russian Federation, moderate growth still can be expected. Asian Development Bank, ‘Asian Development Outlook 2019: Strengthening Disaster Resilience’ (2019) <www.adb.org/sites/default/files/publication/492711/ado2019.pdf> accessed 6 June 2020. To be specific, Kazakhstan’s economic growth is far ahead of the other four countries due to exporting of natural resources, stronger political leadership and improved national economic management. The GDP of Kazakhstan was USD 24.8 billion when the country officially declared independence in 1991, which increased to USD 236.6 billion in 2013 when the price of oil and gas prices peaked, taking a huge step forward to a middle-developed country concerning its per capita GDP being USD 1.3890 billion (Source: Websites of the World Bank). Central Asian presidents have noticeable freedom of action concerning economic policies and reforms. But those countries highly dependent on volatile fossil fuel and commodities prices and vulnerable to fluctuations in the weakening global economy. See Ariel Cohen, ‘The Need for Soft Infrastructure Development in Central Asia: Pathway to Growth’ (25 November 2019) <https://doc-research.org/2019/11/infrastructure-development-central-asia/> accessed 6 June 2020. Table Source: Websites of the World Bank.
18 See speech at ‘Global Business Context’ Session in Davos World Economic Forum from Chairman of Doğuş Holding, Ferit F Şahenk (20 January 2020) <www.dogusgrubu.com.tr/en/economic-power-is-moving-from-north-to-south-and-west-to-east> accessed 4 June 2020.
19 James Grant, ‘China Looks to Central Asia as an Economic Alternative’ The Diplomat (18 December 2019) <https://thediplomat.com/2019/12/china-looks-to-central-asia-as-an-economic-alternative/> accessed 4 June 2020.
20 Office of the US Secretary of Defense, ‘Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2016’ <https://dod.defense.gov/Portals/1/Documents/pubs/2016%20China%20Military%20Power%20Report.pdf> accessed 6 June 2020.
21 Richard Pomfret, The Central Asian Economies in the Twenty-First Century: Paving a New Silk Road (Princeton University Press, 2019) 39.
22 Central Asia has some of the world’s largest oil and gas fields. Several of which are already being exploited, but there are many areas waiting to be discovered and developed. See ‘Central Asia: A Major Player in the Oil and Gas Energy Industry’ (2014) <www.worldfinance.com/markets/central-asia-a-major-player-in-the-oil-and-gas-energy-industry> accessed 6 June 2020. Proven oil and natural gas reserve are around 30 billion barrels and 230–360 trillion cubic feet, but since there are still large areas that have not been explored, these figures are most likely not accurate, geologists predict that the region may have 60–140 billion barrels of oil, even 200 billion barrels. Amy Myers Jaffe, ‘Unlocking the Assets: Energy and the Future of Central Asia and the Caucasus’ (1998) Energy Study by the Centre for International Political Economy and The James. A Baker III Institute for Public Policy, Rice University; Eugene Yukin, Joseph Hincks and Katie Bromley, ‘Two Sides of the Same Sea: The Caspian Region Presents Lucrative but Different Visions for Oil and Gas Investment’ (2012) Global Business Reports <www.gbreports.com/wp-content/uploads/2014/09/CaspianRegion_OilandGas2012.pdf> accessed 6 June 2020.
23 Take Kazakhstan’ energy exports as an example, China-Kazakhstan bilateral energy cooperation has made strides since 1997. China and Kazakhstan both benefit from their close energy relationship, namely it can make up for China’s energy shortage and bring the foreign investment to Kazakhstan. One is holding a share of Kazakhstan’s oil and gas Corporations to obtain the exploitation and operation rights of the oil field to which the company belongs. The first phase of the Sino-Kazakhstan crude oil pipeline project (Atasu-Alashankou) was officially completed and put into production in 2005 and open to commercial operation next year, phase II (Kenkiyak-Kumkol) was completed and started commercial operations in 2009. As for natural gas, the China-Central Asia natural gas pipeline is China’s first transnational energy channel for natural gas imported from the land. The pipeline started in Turkmenistan and Uzbekistan, entered China from Horgos via southern Kazakhstan. As of 7 March 2020, China has imported more than 300 billion cubic meters of natural gas. Source from BRI webpage <www.yidaiyilu.gov.cn/xwzx/gnxw/119506.htm> accessed 6 June 2020. The other part is signing a few agreements to build oil pipelines to deliver oil from Kazakhstan and Russia to China. China and Kazakhstan signed an agreement in 2003 to build oil pipelines in stages. According to a list of the 55 projects of China has invested in Kazakhstan under BRI, about half of the investment total of US$27.6 billion is in oil and gas projects. See Simonov (n 4). Huirong Zhao and Hongwei Wu, ‘China’s Energy Foreign Policy and Caspian Region: The Case of Kazakhstan’ in M.Parvizi Amineh and Yang Guang (eds), Secure Oil and Alternative Energy: the Geopolitics of Energy Paths of China and the European Union (Brill, 2012) 178.
24 Shanghai Cooperation Organization (SCO), Asia-Pacific Economic Cooperation (APEC), Asia-Europe Meeting (ASEM), Conference on Interaction and Confidence Building Measures in Asia (CICA), Central Asia Regional Economic Cooperation (CAREC) Program, and other bilateral energy cooperation mechanisms between China and Central Asia.
25 Such as energy infrastructure connection, cross-border power and transmission channels constructions, and regional grid upgrades. China the world’s largest consumer of energy, the demand for energy has nearly doubled since 2005, according to the forecast of energy demand of China produced by China National Petroleum Corporation (CNPC), ‘Oil demand is expected to peak in 2030 at 705 million tonnes; while gas demand will reach 610 bcma and 690 bcma in 2035 and 2050 respectively, and half of gas supply depends on import due to domestic production only expected to account for around half of demand’. See Michal Meidan, ‘Glimpses of China’s Energy Future’ The Oxford Institute for Energy Studies (September 2019) <www.oxfordenergy.org/wpcms/wp-content/uploads/2019/09/Glimpses-of-Chinas-energy-future.pdf> accessed 8 June 2020; Andrew Stocking and Terry Dinan, ‘China’s Growing Energy Demand: Implications for the United States’ (2015) Working Paper Series Congressional Budget Office <www.cbo.gov/sites/default/files/114th-congress-2015-2016/workingpaper/50216-China_1.pdf> accessed 8 June 2020; Zewei Yang, ‘Situation, Defect and Improvement of Legal System of Energy Cooperation between China and Central Asian States: Form the Silk Road Economic Belt’ (‘共建“丝绸之路经济带”背景下中国与中亚国家能源合作法律制度, 现状、缺陷和重构’) (2016) 37 Legal Science Magazine (《法学杂志》) 18.
26 Anatole Boute, ‘China’s External Energy Security: Energy Trade and Investment Along the “Belt and Road”’ (2019) 20 Journal of World Investment and Trade 195.
27 Kaho Yu, ‘Energy Cooperation Under the Belt and Road Initiative: Implications for Global Energy Governance’ (2019) 20 Journal of World Investment and Trade 243.
28 Wenhua Shan and Peng Wang, ‘The International Legal Framework for Belt and Road Energy Cooperation: Progress and Prospect’ (2019) 20 Journal of World Investment and Trade 259.
29 Kaj Hobér, ‘Arbitration of Energy Disputes Under the Energy Charter Treaty: Added Value for the Belt and Road Initiative’ (2019) 20 Journal of World Investment and Trade 285. Libing Zhang, ‘The Belt and Road Initiative and Its Effects on China’s Energy Law’ in Lutz-Christian Wolff and Chao Xi (eds), Legal Dimension of China’s Belt and Road Initiative (Wolters Kluwer, 2016) 450, 461.
30 OECD/The World Economic Forum, ‘Competitiveness and Private Sector Development: Central Asia 2011: Competitiveness Outlook’ (2011) <https://doi.org/10.1787/9789264097285-en> accessed 5 June 2020.
31 Trade volumes between China-Kazakhstan, China-Uzbekistan, and China-Kyrgyzstan accounted for 13.5%, 18.4%, and 25.5% of their total foreign trade in 2017 respectively, whereas the trade volume between China and Central Asia accounts for less than 1% of China’s total foreign trade. Haiyan Wang, ‘Comparative Research on Geo-economic Cooperation between China and Central Asian Countries under the Perspective of OBOR’ (‘一带一路视域下中国与中亚国家地缘经济合作比较研究’) (2020) 29 World Regional Studies (《世界地理研究》) 18.
32 Natural resources account for the largest share of bilateral trade between Central Asia and China. In recent years, since prices of oil, natural gas and other resource-based products move up and down, the annual trade volume between Central Asia and China has also fluctuated but still has shown a recovery growth. Source: General Administration of Customs of China.
33 Marek Jochec and Jenny Jenish Kyzy, ‘China’s BRI Investments, Risks, and Opportunities in Kazakhstan and Kyrgyzstan’ in Marlene Laruelle (ed), China’s Belt and Road Initiative and Its Impact in Central Asia (2018), Central Asia Program, The George Washington University.
34 Source of Figures 1 and 2: Statistical Bulletin of China’s Outward Foreign Direct Investment, Ministry of Commerce of the People’s Republic of China, National Bureau of Statistics, State Administration of Foreign Exchange.
35 Xiangming Chen and Fakhmiddin Fazilov, ‘Re-centering Central Asia: China’s “New Great Game” in the Old Eurasian Heartland’ (2018) 4 Palgrave Communications 1.
36 Central Asian has the largest overall need for infrastructure investment, requiring over 50% of global investment in infrastructure. Globally, the need for infrastructure investment is forecast to reach $94 trillion by 2040. See Global Infrastructure Hub, ‘Global Infrastructure Outlook’ Oxford Economics (2017) <www.oxfordeconomics.com/recent-releases/Global-Infrastructure-Outlook> accessed 9 June 2020; Central Asia will need $33 billion in infrastructure development by 2030. See Asian Development Bank, ‘Asian Development Bank Member Fact Sheet’ (2019) <www.adb.org/sites/default/files/publication/27811/uzb-2019.pdf> accessed 9 June 2020.
37 The latest statistics indicates that most of the investment along the Belt and Road has so far been in hard infrastructure, areas of e-infrastructure and digital connectivity are becoming increasingly important gradually in the afterward. China International Contractors Association, China Export & Credit Insurance Corporation, ‘The Belt and Road Infrastructure Development Index Report’ (2019) (hereinafter IDIR Report).
38 China plans to expand the cooperation areas to education, science, culture, sports, tourism, health, archaeology; the direction of cooperation is also planned to expand to ‘The Green Silk Road, the Digital Silk Road’. See Speech by Xi Jinping at the Opening Ceremony of the Second Belt and Road Forum for International Cooperation, ‘Working Together to Deliver a Brighter Future for Belt and Road Cooperation’ (26 April 2019) <www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1658424.shtml> accessed 10 June 2020.
39 What is more important is how these are perceived by the outside, given that BRI is too ambitious and ambiguous to supervise and manage. Roza Nurgozhayeva, ‘How Is China’s Belt and Road Changing Central Asia?’ (9 July 2020) <https://thediplomat.com/2020/07/how-is-chinas-belt-and-road-changing-central-asia/> accessed 10 June 2020.
40 Ayjaz Wani, ‘Rising Anti-Chinese Sentiments in Kazakhstan’ (4 October 2019) <www.orfonline.org/expert-speak/rising-anti-chinese-sentiments-in-kazakhstan/> accessed 11 June 2020.
41 Officials of Kazakhstan denied and emphasised any project setup there need to be reviewed by a special state commission. See Darkhan Umirbekov, ‘Kazakhstan: Sinophobic Sentiments Trigger Fresh Rallies’ (4 September 2019) <https://eurasianet.org/kazakhstan-sinophobic-sentiments-trigger-fresh-rallies> accessed 12 June 2020.
42 See ‘Kazakhs Protest Chinese Money, Influence for Third Day’ (4 September 2019) <www.rferl.org/a/kazakhs-protest-chinese-money-influence-for-third-day/30145992.html> accessed 11 June 2020.
43 See ‘Dozens Protest Against Chinese Influence in Kazakhstan’ (4 September 2019) <www.thestar.com.my/news/world/2019/09/04/dozens-protest-against-chinese-influence-in-kazakhstan> accessed 12 June 2020.
44 Kazakhstan’s land reform was originally to attract investment to the agricultural sector, but it was used as a weapon against China. However, in fact, only 282 hectares of land was rented by the Chinese out of 99.5 million hectares of leased farmland. There was no evident to prove Chinese willing to rent more farmland. See Kemel Toktomushev, ‘Chinese Bogeyman and Land Reform in Kazakhstan’ (3 October 2016) <www.chinausfocus.com/finance-economy/chinese-bogeyman-and-land-reform-in-kazakhstan> accessed 12 June 2020.
45 See Catherine Putz, ‘Kyrgyz-Chinese Joint Venture Scrapped After Protests’ (20 February 2020) <https://thediplomat.com/2020/02/kyrgyz-chinese-joint-venture-scrapped-after-protests/> accessed 13 June 2020.
46 Officials of Kazakhstan admitted local workforce sometimes lacks the experience required to fill even low-skilled positions. See Chris Rickleton, ‘Kazakhstan Seeks Labour Market Corrections to Quell Grumbling’ (15 January 2020) <https://eurasianet.org/kazakhstan-seeks-labor-market-corrections-to-quell-grumbling> accessed 13 June 2020.
47 All provincial governments in China have scrambled to list preferred projects and industries supported by BRI and released supportive policies to attract more companies to join.
48 Jie Yu, ‘The Belt and Road Initiative: Domestic Interests, Bureaucratic Politics and the EU-China Relations’ (2018) 16 Asia Europe Journal 223.
49 According to statistics, China-Europe Railway Express made 6363 trips in 2018, which is close to the total number of trains in operation from 2011 to 2017. As of 2019, the cumulative number was 12,937 trips. Institute of International Trade and Economic Cooperation, Ministry of Commerce of China, ‘China-Europe Railway Express Trade Corridor Development Report 2019’.
50 Andreea Brinza, ‘China’s Continent-Spanning Trains Are Running Half-Empty’ (5 July 2017) <https://foreignpolicy.com/2017/06/05/chinas-continent-spanning-trains-are-running-half-empty-one-belt-one-road-bri/> accessed 13 June 2020.
51 Rail only carried 1.3% of trade between China and European Union in 2018. Sidney Leng, ‘China’s Belt and Road Cargo to Europe under Scrutiny as Operator Admits to Moving Empty Containers’ (6 August 2019) <www.scmp.com/economy/china-economy/article/3023574/chinas-belt-and-road-cargo-europe-under-scrutiny-operator> accessed 13 June 2020.
52 For this purpose, the Ministry of Finance of China has required local governments to lower the subsidy standards for China-Europe Railway: based on the entire freight of the trip, the subsidy shall not exceed 50% of the freight in 2018, 40% in 2019, 30% in 2020 and zero by 2020.
53 Such as a power plant modernisation project, which was invested by a Chinese company called TBEA for USD 386 million, was found that the project did not even go through the due process from the beginning. There was no open tendering. USD 100 million was not spent on actual construction, 90% of the necessary materials and equipment were bought at an unreasonable ‘elevated price’. The further report shows the contract with TBEA was clearly unfair for Kyrgyzstan, who will need to repay almost $470 million through the credit arrangement for this project. Clearly, Corruption is involved here, officials and project leaders have been arrested on suspicion of corruption, and the then President was considered to abuse his power on intervening in economic issues. This failure of project has sparked distrust and opposition among central Asia to BRI. Elnur Alkanova, ‘Abuse of Power? On the Trail of China’s Mystery Millions in Kyrgyzstan’ (24 October 2018) <www.opendemocracy.net/en/odr/what-happened-at-bishkek-power-plant/> accessed 14 June 2020.
54 Elaine Dezenski, ‘Below the Belt and Road: Corruption and Illicit Dealings in China’s Global Infrastructure’ (6 May 2020) <www.fdd.org/analysis/2020/05/04/below-the-belt-and-road/> accessed 14 June 2020.
55 Kenya government and the China Road and Bridge Corporation (CRBC) signed a $3.2 billion contracts for Standard Gauge Railway project and the projects have been completed and operational since 2017. However Kenyan activist and Law Society of Kenya filed a lawsuit on the grounds that China Road and CRBC had won a public project without tendering. The case was dismissed by Kenyan’s high court, but appeals court has ruled that the contract between the Kenyan government and CRBC failed to comply with its laws. See Global Construction Review, ‘Kenya’s Court of Appeals Finds SGR Contract with China Road and Bridge Corporation Was Illegal’ (29 June 2020) <www.globalconstructionreview.com/news/kenyas-court-appeals-finds-sgr-contract-china-brid/> accessed 14 June 2020.
56 The total lending to transport and energy projects from Africa to Central Asia at $461 billion under BRI. See Elliot Wilson, ‘China: End of the Belt and Road?’ (4 June 2020) <www.euromoney.com/article/b1lx4xdjgghf3z/china-end-of-the-belt-and-road> accessed 14 June 2020.
57 IDIR Report (n 37).
58 John Hurley, Scott Morris and Gailyn Portelance, ‘Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective’ Center Global Development Policy Paper 121 (March 2018) <www.cgdev.org/sites/default/files/examining-debt-implications-belt-and-road-initiative-policy-perspective.pdf> accessed 2 June 2020.
59 According to research from Germany’s Kiel Institute and Institute of International Finance, China’s lending to developing countries at $520 billion, outstanding debt claims from the rest of the world are estimated at $5.5 trillion. These statistics may not be accurate due to a lack of data on the resulting debt flows and stocks. What is more, nearly half of loans go unreported, but there is no doubt China has become the world’s major lender globally. See Bloomberg News, ‘China to Impose Stricter Policy on Bad-Loan Recognition’ (6 May 2019) <www.bloomberg.com/news/articles/2019-05-06/china-is-said-to-impose-stricter-policy-on-bad-loan-recognition> accessed 14 June 2020.
60 The cost of some BRI projects was too much for developing countries to repay, or the total investment signed in projects’ contracts far exceeds the actual cost.
61 Pakistan, Malaysia, Myanmar, Bangladesh and Sierra Leone have cancelled or cut budgets from the previous BRI projects.
62 Intelligence Unit, the Economist, ‘Belt and Road Initiative Quarterly: Q3 2018’ (23 August 2018) <http://country.eiu.com/article.aspx?articleid=1727064356&Country=China&topic=Politics> accessed 14 June 2020.
63 Sebastian Horn, Carmen M Reinhart and Christoph Trebesch, ‘How Much Money Does the World Owe China’ Harvard Business Review (26 February 2020) <https://hbr.org/2020/02/how-much-money-does-the-world-owe-china> accessed 14 June 2020.
64 Such as China Development Bank and The Export-Import Bank of China.
65 Jiaguo Qi and Rashid Kulmatov, ‘An Overview of Environmental Issue in Central Asia’ in Jiaguo Qi and Kyle Evered (eds), Environmental Problems of Central Asia and Their Economic, Social and Security Impacts. NATO Science for Peace and Security Series C: Environmental Security (Springer, 2008) 3.
66 Duncan Brack, ‘International Environmental Disputes’ International Forums for Non-compliance and Dispute Settlement in Environment-related Cases (2001) <www.ippc.int/static/media/files/publications/en/1182350929558_Noncompliance_Brack.pdf> accessed 15 June 2020.
67 Hao Zhang, ‘The Carbon Externality of Investments Financed by China’s Development Banks: The Case of Energy Investments in Central Asia’ (2019) 20 Journal of World Investment and Trade 1.
68 Ministry of Environmental Protection of China, Ministry of Foreign Affairs of China, Development and Reform Commission of China, Ministry of Commerce of China, ‘Guidance on Promoting a Green Belt and Road’ (‘关于推进绿色“一带一路”建设的指导意见’) (2017).
69 Digital technology is not only the main battlefield for international competition but also a new direction for international cooperation.
70 Economic and Social Commission for Asia and the Pacific of United Nations, ‘A Study of ICT Connectivity for the Belt and Road: Enhancing the Collaboration in China-Central Asia Corridor’ (2017).
71 National strategies in every Central Asia counties include ‘Digital Uzbekistan – 2030’ program released in November 2019, ‘Digital Kazakhstan’ state program released in December 2017, ‘The Concept of Digital Transformation of Kyrgyzstan for 2019–2023’ released in December 2018, ‘The Concept of Digital Economy’ in Tajikistan released in December 2019, ‘The Concept of Development of Digital Economy for 2019–2025’ in Turkmenistan released in November 2018. ‘Silk Road Optical Cable Projects’ between China Telecom and Kyrgyzstan, China Telecom and Tajikistan were launched in 2017. In terms of network construction, companies such as Huawei and ZTE are already participants in the digital economy of Central Asian countries such as Uzbekistan and Kazakhstan, as well as important telecommunications equipment suppliers. The BigTechs of China have deployed digital industries in Central Asia.
72 Jiangyu Wang, ‘Dispute Settlement for the Belt and Road Initiative: Progress, Issues, and Future Research Agenda’ (2020) 8 The Chinese Journal of Comparative Law 4.
73 Ibid.
74 Paul Collier, ‘Why the WTO Is Deadlocked: And What Can Be Done About It’ (2006) 29 The World Economy 1423.
75 Turkmenistan has been granted Observer status in July 2020, while Uzbekistan has been in on-and-off negotiations on WTO accession since 1994, Uzbekistan did not resume membership negotiation until 7 July 2020. See the website of WTO <www.wto.org/english/news_e/news20_e/acc_uzb_07jul20_e.htm> accessed 16 June 2020.
76 Friedl Weiss, ‘Coalitions of the Willing: the Case for Multilateralism vs. Regional and Bilateral Arrangements in World Trade’ in Christian Calliess, Georg Nolte and Peter-Tobias Stoll (eds), Coalition of the Willing: Avantgarde or Threat? (Carl Heymanns Verlag, 2006) 51.
77 Apart from Turkmenistan, China and the other four central Asian countries are members of the SCO.
78 The soft law in BRI can illustrate that China prefers less formal and more flexible arrangements. Heng Wang, ‘China’s Approach to the Belt and Road Initiative: Scope, Character and Sustainability’ (2019) 22 Journal of International Economic Law 29.
79 BITs signed between China and Central Asian countries allow both parties to resolve disputes through arbitration after exhaustion of diplomatic negotiations. ‘If a dispute cannot thus be settled within six months, it shall, upon the request of either Contracting Party, be submitted to an ad hoc arbitral tribunal.’ ‘The arbitral tribunal shall determine its own procedure and shall reach its award in accordance with the provisions of this Agreement and the principles of international law recognized by both Contracting Parties.’ Articles in every BITs between China and Central Asian countries.
80 Wang (n 72).
81 Such as financial unsustainability of Hambantota Port project in Sri Lanka has resulted the Hambantota Port and 15,000 acres of surrounding land to be forced to lease to China for 99 years. SCMP Reporter, ‘Explained: The Belt and Road Initiative’ South China Morning Post’ (February 2019) <www.scmp.com/week-asia/explained/article/2187162/explained-belt-and-road-initiative> accessed 17 June 2020. Or East Coast Rail Link project signed 2017 in Malaysia had been renegotiated and cut nearly one-thirds of the original cost out of rising debt concerns. Channel News Asia, ‘East Coast Rail Link Back on after Malaysia, China Agree to Slash Cost by Over 30%’ (12 April 2019) <www.channelnewsasia.com/news/asia/east-coast-rail-link-proceed-malaysia-china-slash-costs-11438428> accessed 17 June 2020. Or the Myanmar government scaled back a Chinese-funded port deal negotiated by its previous regime. Bloomberg News, ‘China Moves to Define “Belt and Road” Projects for First Time’ (3 April 2019) <www.bloomberg.com/news/articles/2019-04-03/china-moves-to-define-belt-and-road-projects-for-first-time> accessed 17 June 2020.
82 Julien Chaisse and Jamieson Kirkwood, ‘Chinese Puzzle: Anatomy of the (Invisible) Belt and Road Investment Treaty’ (2020) 1 Journal of International Economic Law 7.
83 A lot of research on the development of Chinese IIAs, which have been categorized into two (1982–1996) or three generations (1982–1988/1989–1996/1997–). See Wei Shen, ‘Evolution of Non-discriminatory Standards in China’s BITs in the Context of EU-China BIT Negotiations’ (2018) 17 Chinese Journal of International Law 799; Hongling Ning and Tong Qi, ‘A Chinese Perspective on the Investment Court System in the Context of Negotiating EU-China BIT’ (2018) 11 Tsinghua China Law Review 91; Chaisse and Kirkwood (n 82).
84 Articles of BITs between China and Kazakhstan, Kyrgyzstan, and Tajikistan.
85 Chinese new BIT model was converging with that of developed nations, Previous capital exporting jurisdictions have dominated the original treaty models, so the most of IIAs share the similar structures, purposes, and principles.
86 Tyler Cohen and David Schneiderman, ‘The Political Economy of Chinese Bilateral Investment Treaty Policy’ (2017) 5 The Chinese Journal of Comparative Law 110.
87 Norah Gallagher and Wenhua Shan, Chinese Investment Treaties: Policies and Practice (Oxford University Press, 2009) 12; Cohen and Schneiderman (n 86).
88 In comparison, dispute settlement mechanism in China-Uzbekistan BIT is much more conducive to protect the rights and interests of Chinese investors under the BRI’s umbrella, especially in the current adverse circumstances where the BRI projects are frequently blocked in Central Asia.
89 Article 16 of China-Uzbekistan BIT (2011).
90 Article 6 of China-Uzbekistan BIT (2011).
91 As of this writing, Non-members of ICSID: 29 states; Non-contracting signatories of ICSID: 6 states. Xiangxiu Wang, ‘The Construction of Investment Dispute Settlement Mechanism under the Belt and Road Initiative’ (‘论 “一带一路” 倡议下投资争端解决机制的构建’) (2020) 4 Northeast Asia Forum (《东北亚论坛》) 15.
92 Jingxia Shi and Nuan Dong, ‘The Construction of Investor-State Dispute Settlement Mechanism under “The Belt and Road” Initiative’ (‘“一带一路”倡议下投资争端解决机制的构建’) (2018) 2 International Law Review of Wuhan University (《武大国际法评论》) 1.
93 Jian Zhang, ‘Analysis of the Issues of Recognition and Enforcement of International Investment Arbitral Awards in China International Commercial Court’ (‘国际商事法庭承认与执行国际投资仲裁裁决问题探析’) (2020) 1 Journal of International Law (《国际法学刊》) 122.
94 Fang Xiao, ‘The “Commercialization” and Reflection of Judicial Review of International Investment Arbitration Awards: Taking the U.S. Supreme Court’s “BG Company v. Argentina” Decision as an Example’ (‘国际投资仲裁裁决司法审查的“商事化”及反思——以美国联邦最高法院 “BG公司诉阿根廷”案裁决为例’) (2018) 209 Law Review (《法学评论》) 152.
95 Mark Feldman, ‘State-owned Enterprises as Claimants in International Investment Arbitration’ (2016) 31(1) ICSID 24.
96 For instance, §1650, §1650a of the United States Code 21A was regulated under the Washington Convention. However, China has not yet designated any court or other bodies in charge of the enforcement of ICSID awards or enacted any legislation or relevant judicial interpretation to clarify to clarify the recognition and enforcement of investment arbitration awards in China. Yuan Xue, ‘The Adjustment of Chinese Legal System to Reconcile with Investor-State Dispute Arbitration Mechanism’ (‘投资者与东道国争端仲裁与我国法律机制的衔接’) (2017) 5 International Business (《国际商务》) 120; Junrong Song, ‘An Analysis of U.S. Legislation and Practice on Recognition and Enforcement of ICSID Arbitral Awards’ (‘美国承认执行 ICSID 仲裁裁决的立法与实践评析’) (2019) 26 Journal of SUIBE (《上海对外经贸大学学报》) 73.
97 Therefore, the emphasis should be put on the difficulty of recognition and enforcement of non-ICSID investment arbitration awards. Specifically, for the investment disputes between China and Central Asian countries under the BRI, the point is how to ensure that the award is recognized and enforced in Central Asia after the claims of Chinese investors are supported by the non-ICSID arbitration tribunal. There is no legislation on the recognition and enforcement of non-ICSID awards in China.
98 The People’s Republic of China will apply the Convention, only on the basis of reciprocity, to the recognition and enforcement of arbitral awards made in the territory of another Contracting State; The People’s Republic of China will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the People’s Republic of China. Completely different interpretations on Compensation for Expropriation given by different arbitral tribunals based on earlier BITs have confused investors. Ekran Berhad v China reached a settlement then no interpretation from tribunal; The award of Tza Yap Shum v Republic of Peru about jurisdiction was not interpreted from arbitration clause of compensation for expropriation; the focus of Sanum Investments Limited v Lao People’s Democratic Republic is that the application of BITs in Special Administrative Region; The arbitration tribunal of China Heilongjiang International Economic & Technical Cooperative Corp, Beijing Shougang Mining Investment Company Ltd, Qinhuangdaoshi Qinlong International Industrial Co Ltd v Mongolia gave a narrow interpretation on compensation for expropriation and rejected all claims made by Chinese investors; In Beijing Urban Construction Co Ltd v Republic of Yemen, Chinese investor’s arbitration requests was supported. See Shixi Huang, ‘Differences in the Interpretation of the Arbitration Clause on the Amount of Compensation in the Investment Agreement and China’s Response’ (‘投资协定 “征收补偿款额仲裁条款”的解释分歧及中国应对’) (2019) 2 Law Science (《法学》) 165.
99 The Republic of Tajikistan will apply this Convention to differences and arbitral [a]wards arised out after entering into force of this Convention with respect to the Republic of Tajikistan and made in the territory of another Contracting State; The Republic of Tajikistan will not apply this Convention with regard to differences related to immovable property.
100 The new Arbitration Law integrated the previous arbitration laws that separate domestic and international arbitration.
101 Article 8 of Kazakhstan Arbitration Law.
102 Civil cases here include commercial, marriage, family and labour cases. To put more accurately, only 28 countries long the Belt and Road, less than one-fifth of the total, have signed bilateral judicial assistance treaties including the recognition and enforcement of foreign judgments with China.
103 Disputes here are not including the State-to-State disputes, which were discussed in the previous article.
104 Mingfei Ma and Siyang Cai, ‘The Principle of Reciprocity of China in Recognition and Enforcement of Foreign Judgements: Dilemma and Solutions’ (‘我国承认与执行外国判决中的互惠原则: 困境与破解’) (2019) 3 Political Science and Law (《政治与法律》) 121.
105 SPC, ‘Several Opinions of the Supreme People’s Court on Providing Judicial Services and Safeguards for the Construction of the “Belt and Road” by People’s Courts’ (‘关于人民法院为“一带一路”建设提供司法服务和保障的若干意见’) (16 June 2015); ‘Nanning Statement of the 2nd China-ASEAN Justice Forum’ (‘第二届中国-东盟大法官论坛南宁声明’) (8 June 2017). See Zhihui Huang, ‘Dilemma and Solution in China’s Application of Principle of Reciprocity in Recognition and Enforcement of Judgment’ (‘我国判决承认与执行中互惠原则实施的困境与出路’) (2018) 36 Tribune of Political Science and Law (《政法论坛》) 63.
106 As early as October 2015, the Tel Aviv Court of Israel recognized the civil judgment made by the Nantong Intermediate People’s Court, and the judgment was subsequently upheld by the Israeli Supreme Court. However, in 2017, the Intermediate People’s Court of Fuzhou, China rejected the Israeli party’s (S.L. Jonas Ltd) application for recognition and enforcement of the civil judgment of the Jerusalem Magistrates’ Court on the grounds that there was no reciprocal relationship. Which is not the first case that Chinese courts have ignored the recognition and enforcement of Chinese judgments by foreign courts and have rejected the recognition and enforcement of foreign judgments in China.