By: Matthew S. Erie
The COVID-19 pandemic has cast doubt on taken-for-granted economic and governance models. Against the backdrop of increasing tension between the United States and the People’s Republic of China (“PRC” or “China”), China is presenting itself as an alternative center for governance. Pursuant to these seismic shifts, the analysis must attune to how China creates cross-border order. Whereas scholars have examined China’s use of trade and investment law, inadequate attention has been paid to how the PRC grapples with the domestic law of host states. As the PRC seeks to protect its investments abroad and promote its geopolitical interests, it is confronted with challenges familiar to capital-exporting countries, yet there is little understanding of China’s approach to ordering or what it means for host states, developed economies, and global governance.
This Article seeks to provide an analytical framework for China’s approach, and specifically the role of law in global development. Instead of previous approaches to “law and development,” China is reluctant to engage in legal reform of host states that receive Chinese capital; rather, Chinese investors try to avoid local law. “Chinese law and development” (“CLD”) creates order through transnational law, which builds on legal infrastructures both from the United States and from China, supplemented by extralegal and nonlegal norms. These normative orders protect Chinese investments by mitigating risk as a precondition to promoting China’s economic and political interests overseas. Drawing on three years of fieldwork and nearly 150 interviews in China and in host states, this Article presents the first empirical study of CLD to articulate an analytical theory to understand this phenomenon. In assessing CLD, I query whether CLD is good for developing states, and identify a research agenda for the study of the legal and regulatory dimensions of Chinese economic globalization.