Selected Papers of the Jurist (法学家) Volume 7
Edited by Jichun Shi
Chapter 12: Regulation of performance requirements in the context of international trade and investment rules
Performance requirements (PRs) are in essence measures host country governments take in exercising the right to regulate foreign investors and their investments, promoting the benefits of foreign investments to sustainable development in the host country. There is controversy over whether or not and to what extent PRs should be prohibited owing to the dual feature of PRs and the non-conclusive results of empirical effectiveness assessments of PRs. The regulation of PRs by international investment treaties should take into account the right of the host country to regulate, and a general prohibition with various exceptions balancing rights and obligations between the host and the home country may be the best approach to tackle the issue. The WTO commitments concerning PRs that China has made may it difficult for the country to develop its PRs policy.
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