A Comparative Study of China’s Bilateral Investment Treaties (BITs) with Selected Eastern African Countries: Gaps, Outdated Frameworks, and Modern Developments
Abstract
It has been a while since Chinese investors established their dominant presence in Africa. Despite this, most Sino-African BITs are often criticised for failing to strike a balance between promoting Chinese investments and protecting public interests. Thus, this research examines the sufficiency of the existing international legal protections available to Chinese investors in Eritrea, Ethiopia and Tanzania. In doing so, it employs a qualitative research method that is primarily dependent on a comparative legal analysis and thus analyses the China-Tanzania and China-Ethiopia BITs by comparing them with each other and with other more recent BITs. At the same time, it makes a thematic analysis, using the manner in which these BITs define “investment” and “investor”, the favourable treatments they offer, the “regulatory space” and indirect expropriation regime they establish, the ISDS mechanisms they provide access to, and their commitment to safeguard public interests as guiding parameters. It also examines the potential adverse impacts of the absence of a BIT between Eritrea and China on their investment relations. The findings reveal that the legal protections available to Chinese investors vary significantly between the selected countries- from nothing in Eritrea to weak in Ethiopia and to relatively robust and comprehensive in Tanzania. The Sino-Ethiopian investment relationship is governed by an old BIT that has many limitations, making the available legal protections weak. In contrast, the Sino-Tanzanian investment relationship operates under a modern BIT designed to strike a balance between attracting Chinese investment and safeguarding Tanzania’s broader public interests, resulting in comprehensive and robust legal protections. Hence, this research recommends the conclusion of a BIT between Eritrea and China, a replacement (renegotiation) of the China-Ethiopia BIT, and a revision of the China-Tanzania BIT so that environmental concerns, human rights issues, and social development notions, including corporate social responsibility, are addressed adequately. It, in particular, calls Eritrea and Ethiopia to draw lessons from the China-Tanzania BIT, and thereby create a legal environment conducive to Chinese investors while at the same time ensuring that their domestic investors are not chocked and the natural environment and other public interests are not jeopardised
Downloads
References
Accaoui Lorfing, P. (2023). Unsustainable Investment: Scoping Expropriation without Compensation. In O. Quirico & K. Kwapisz Williams (Eds.), The European Union and the Evolving Architectures of International Economic Agreements (pp. 95–108). Springer Nature Singapore. https://doi.org/10.1007/978-981-99-2329-8_6
African Development Bank Group. (2025). Fragility and Resilience. Eritrea. https://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/fragility-resilience/promoting-private-investment-in-transition-countries/the-horn-of-africa-opportunity/country-profiles/eritrea
Akinkugbe, O. D. (2021). Africanization and the reform of international investment law. Case W. Res. J. Int’l L., 53, 7.
Amahazion, F. (2021). Dragon Meets Camel: An Exploration of China’s Engagement with Eritrea. Journal of Social and Development Sciences, 12(4 (S)), 59–85.
Amin, G. F. (2020). All that Glitters is Not Always Gold or Silver: Typical Bilateral Investments Treaties (BITs) Clauses as Peril to Third World Economic Sovereignty. Athens JL, 6, 299.
Baltag, C., & Dautaj, Y. (2021). Promoting, regulating, and enforcing human rights through international investment law and ISDS. Fordham Int’l LJ, 45, 1.
Beri, P. B., & Nubong, G. F. (2021). Impact of bilateral investment treaties on foreign direct investment in Africa. African Development Review, 33(3), 439–451. https://doi.org/10.1111/1467-8268.12583
Brazil-Ethiopia BIT. (2018). Brazil-Ethiopia BIT (2018). Available at https://investmentpolicy.unctad.org/international-investment-agreements/countries/67/ethiopia
Calvert, J. E. (2016). Reclaiming Domestic Agency: International Investment Agreements and the Defence of Policy Space in Latin America [PhD Thesis, Carleton University]. https://repository.library.carleton.ca/concern/etds/qb98mg31f
Chacha, M. J. (2022). Impacts of Chinese-Africa Relations: Case Study of Tanzania with Reference to the Legal Implications Therein? Issue 3 Int’l JL Mgmt. & Human., 5, 1271.
China Daily. (2024a). China remains Africa’s largest trading partner for 15 consecutive years. https://www.chinadaily.com.cn/a/202402/01/WS65bb0384a3104efcbdae91bc.html
China Daily. (2024b). Chinese premier meets Eritrean president. https://www.chinadailyhk.com/hk/article/592176
China-Africa Research Initiative. (2022). Chinese Investment in Africa. http://www.sais-cari.org/chinese-investment-in-africa
China-Ethiopia BIT. (1998). China-Ethiopia BIT (1998). Available at https://investmentpolicy.unctad.org/international-investment-agreements/countries/42/china
China-Tanzania BIT. (2013). China-United Republic of Tanzania BIT (2013). Available at https://investmentpolicy.unctad.org/international-investment-agreements/countries/222/tanzania-united-republic-of
China-Turkey BIT. (2015). China-Turkey BIT (2015). Available at https://investmentpolicy.unctad.org/international-investment-agreements/countries/214/t-rkiye
Daily News. (2024). Tanzania Seeks Chinese FDI. https://dailynews.co.tz/tanzania-seeks-7tri-chinese-fdis/
De Vriese, K. (2022). How to?: A Methodological Guide to Identify a Treaty’s Object and Purpose. The Law & Practice of International Courts and Tribunals, 21(1), 35–97.
Disassa, D. D. (2022). Balancing Interest under Bilateral Investment Treaties of Ethiopia: Focusing on State Regulatory Rights. Hawassa UJL, 6, 1.
Dumberry, P. (2017). The Importation of the FET Standard through MFN Clauses: An Empirical Study of BITs. ICSID Review-Foreign Investment Law Journal, 32(1), 116–137.
EIC. (2025). China leads Ethiopia’s FDI inflows. https://press.et/herald/?p=108528
Ericsson, M., Löf, O., & Löf, A. (2020). Chinese control over African and global mining—Past, present and future. Mineral Economics, 33(1–2), 153–181. https://doi.org/10.1007/s13563-020-00233-4
Ethiopian Broadcasting Corporation. (2024). PM Abiy Meets Chinese President Xi Jinping, Strengthening Bilateral Ties. https://www.ebc.et/english/newsdetails.aspx?newsid=7726.
Ethiopia-UK BIT. (2009) Ethiopia-United Kingdom BIT (2009). Available at https://investmentpolicy.unctad.org/international-investment-agreements/countries/67/ethiopia.
Freddy, H. J., & Bijukumar, V. (2024). New Trends in Emerging Power-Great Power Conflicts. Springer Nature. https://books.google.com/books?hl=en&lr=&id=1oIKEQAAQBAJ&oi=fnd&pg=PR7&dq=Freddy,+H.+J.,+%26+Bijukumar,+V.+(2024).+New+Trends+in+Emerging+Power-Great+Power+Conflicts.+&ots=CKxZ1PDlxW&sig=8OqXLo8CioQy7Ng7i946L5anRNw
Fried, J. M., & Kamar, E. (2021). Alibaba: A Case Study of Synthetic Control. Harv. Bus. L. Rev., 11, 279.
Ghaziani, M. A., & Ghaziani, M. A. (2021). The Role Of Expropriation Clauses In Protection And Promotion Of Foreign Investments In Renewable Energy: An Essential But Overlooked Legal Consideration. Indon. L. Rev., 11, 191.
Gopalan, S., Park, C.-Y., & Rajan, R. S. (2023). Do International Investment Agreements attract Foreign Direct Investment inflows? Revisiting the literature. Economic Analysis and Policy, 80, 471–481.
Green Finance and Development Center. (2023). Countries of the Belt and Road Initiative (BRI). https://greenfdc.org/countries-of-the-belt-and-road-initiative-bri/
Han, X. (2022). International Investment Rule of Law Between China and Africa. In X. Han, Legal Protection and Sustainability of Chinese Investments in Africa (pp. 179–208). Springer Nature Singapore. https://doi.org/10.1007/978-981-19-1882-7_6
Hankings-Evans, A. (2022). Chapter 9: Africa’s Human Rights and Development-Based Approaches to International Investment Law. In J. Scheu, R. Hofmann, S. W. Schill, & C. J. Tams (Eds.), Investment Protection, Human Rights, and International Arbitration in Extraordinary Times (pp. 291–336). Nomos Verlagsgesellschaft mbH & Co. KG. https://doi.org/10.5771/9783748914068-291
Idemudia, U., Tuokuu, F. X. D., & Essah, M. (2022). The extractive industry and human rights in Africa: Lessons from the past and future directions. Resources Policy, 78, 102838.
Johnson, L., Sachs, L., Guven, B., & Coleman, J. (2018). Costs and Benefits of Investment Treaties: Practical Considerations for States. Available at SSRN 3277965. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3277965
Khamidov, S. (2023). INDIRECT EXPROPRIATION THROUGH THE PRISM OF INTERNATIONAL LAW. Oriental Renaissance: Innovative, Educational, Natural and Social Sciences, 3(9), 259–263.
Khujaniyazov, A. (2024). NEW WTO LAW DEVELOPMENT VECTORS AND SPECIFIC APPLICATION ISSUES WITH THE SUBSIDY INSTRUMENT. Центральноазиатский Журнал Образования и Инноваций, 3(6), 104–117.
Kidane, W. (2016). China’s bilateral investment treaties with African states in comparative context. Cornell Int’l LJ, 49, 141.
Kidane, W. (2022). Trends in China-Africa Economic Relations and Dispute Settlement. Nw. J. Int’l L. & Bus., 43, 291.
Lloyds Banks. (2024). Eritrea: Investing. https://www.lloydsbanktrade.com/en/market-potential/eritrea/investing
Man, A. (2019). Old players, new rules: A critique of the China-Ethiopia and China-Tanzania bilateral investment treaties. In Sustainable Trade, Investment and Finance (pp. 151–171). Edward Elgar Publishing. https://www.elgaronline.com/downloadpdf/edcollchap/edcoll/9781788971034/9781788971034.00015.pdf
Martinez-Fraga, P. J., & Pampin, J. M. (2017). Reconceptualising the statute of limitations doctrine in the international law of foreign investment protection: Reform beyond historical legacies. NYUJ Int’l L. & Pol., 50, 789.
McNamara, T. S. (2019). The China-Canada BIT, Its Shortcomings, and the Risks for Chinese Investors. Beijing L. Rev., 10, 287.
MESERVEY, J. (2023). Eritrea’s Growing Ties with China and Russia Highlight America’s Inadequate Approach in East Africa. http://media.hudson.org.s3.amazonaws.com/071823_Meservey_China_Eritrea_Memo.pdf
Middle East Cement Shipping and Handling Co. S.A. v. Arab Republic of Egypt. (2002). ICSID Case No. ARB/99/6. Available at https://www.italaw.com/cases/699
Mseteka, P. J. (n.d.). The elusive quest for consensus on the scope and regulation of indirect expropriation. Retrieved February 1, 2025. https://wiredspace.wits.ac.za/items/a7c355c6-2cf6-4df9-b270-05fe40a0a523
Nair, A. (2024). Arbitration in Investment Disputes: Balancing Investor Rights and State Sovereignty. Jus Corpus LJ, 5, 74.
National Grid plc v. The Argentine Republic. (2008). Available at https://www.italaw.com/cases/732
NEDOPIL, C. (2023). China Belt and Road Initiative (BRI) Investment Report 2023 H1. https://greenfdc.org/wp-content/uploads/2023/07/Nedopil-2023_China-Belt-and-Road-Initiative-BRI-Investment-Report-2023-H1-1.pdf
Ofosu, G., & Sarpong, D. (2022). China in Africa: On the Competing Perspectives of the Value of Sino-Africa Business Relationships. Journal of Economic Issues, 56(1), 137–157. https://doi.org/10.1080/00213624.2022.2020025
Olmedo, J. G. (2020). Recalibrating the international investment regime through narrowed jurisdiction. International & Comparative Law Quarterly, 69(2), 301–334.
Qiaofang, W. (2024). Research on Enhancing Bilateral Investment Protection in the 'Belt and Road’ Countries: Based on the Current China-Sri Lanka Bit. China Legal Sci., 12, 3.
Riffel, C. (2022). Indirect Expropriation and the Protection of Public Interests. International & Comparative Law Quarterly, 71(4), 945–974.
Ross, A. G., & Fleming, N. (2022). The impact of Chinese foreign direct investment on host country economic growth. Local Economy: The Journal of the Local Economy Policy Unit, 37(6), 507–525. https://doi.org/10.1177/02690942231162850
Salacuse, J. W. (2021). The law of investment treaties. Oxford University Press. https://books.google.com/books?hl=en&lr=&id=E70cEAAAQBAJ&oi=fnd&pg=PT21&dq=Salacuse,+J.+W.+(2021).+The+law+of+investment+treaties.+Oxford+University+Press&ots=utjdnCVyK9&sig=OdjgXR3TfmkzG44m8jg52OQXDgA
Schapper, A. (2021). Climate Justice Concerns and Human Rights Trade-Offs in Ethiopia’s Green Economy Transition: The Case of Gibe III. The European Journal of Development Research, 33(6), 1952–1972. https://doi.org/10.1057/s41287-020-00340-6
Signorelli, E. (2024). Belt and Road Initiative: Understanding China’s hallmark foreign policy through the Lens of Kenya and Tanzania. https://lup.lub.lu.se/student-papers/search/publication/9163341
Tang, Y. (2024). General Public Policy Exceptions in International Investment Agreements (IIAs): Opportunities and Challenges in Times of Global Health Crisis. Asian Center for WTO & International Health Law & Policy (ACWH) Forthcoming. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4982291
Tanzania Investment Center. (2024). China-Tanzania Business Forum. https://www.tic.go.tz/events/china-tanzania-business-forum.
Tesfa News. (2013). SFECO Building US$100m Agriculture Related Plants in Eritrea. https://tesfanews.com/sfeco-building-us100m-agriculture-related-plants-in-eritrea/
Tesfa News (2018). Zijin Mining Succeeds Acquiring Nevsun. https://tesfanews.com/zijin-mining-succeeds-to-acquire-nevsun/
Umar, A. I., & Bello, M. (2023). Chinese Investments in the African Mining Sector: An Analysis of the Dispute Settlement Mechanisms. In Mining Law and Governance in Africa (pp. 218–242). Routledge. https://www.taylorfrancis.com/chapters/edit/10.4324/9781003284437-12/chinese-investments-african-mining-sector-abubakar-umar-muhammad-bello
UNCTAD. (2024). UN list of least developed countries. https://unctad.org/topic/least-developed-countries/list
UNCTAD. (2025a). International Investment Agreements Navigator-China. https://investmentpolicy.unctad.org/international-investment-agreements/countries/42/china
UNCTAD. (2025b). International Investment Agreements Navigator-Eritrea. https://investmentpolicy.unctad.org/international-investment-agreements/countries/65/eritrea
Velten, J. (2022). Screening Foreign Direct Investment in the EU: Political Rationale, Legal Limitations, Legislative Options (Vol. 26). Springer International Publishing. https://doi.org/10.1007/978-3-031-05603-1
WTO. (2024). World Trade Organization member states. https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm
Zagel, G. M. (2020). International Investment Agreements (IIAs) and Sustainable Development: Are the African Reform Approaches a Possible Way out of the Global IIA Crisis? Manchester J. Int’l Econ. L., 17, 26.
Zhang, K. H. (2022). Chinese Foreign Direct Investment in Africa: Its Motivations, Determinants, and Impact on the African Economies. In E. F. Wamboye & B. Fayissa (Eds.), The Palgrave Handbook of Africa’s Economic Sectors (pp. 603–624). Springer International Publishing. https://doi.org/10.1007/978-3-030-75556-0_23
Zhu, Y. (2024). A quasi‐normative conflict: Resolving the tension between investment treaties and climate action. Review of European, Comparative & International Environmental Law, 33(2), 183–193. https://doi.org/10.1111/reel.12565
Copyright (c) 2025 Abdu Mohamedali Osman, Maham Zahoor
This work is licensed under a Creative Commons Attribution 4.0 International License.
