Legal Studies Research Paper Series No. 2019-21 A New Chinese Economic Order? Gregory Shaffer
[email protected] University of California, Irvine ~ School of Law Henry Gao
[email protected] Singapore Management University ~ School of Law The paper can be downloaded free of charge from SSRN at: Electronic copy available at: https://ssrn.com/abstract=3370452 A New Chinese Economic Order? By Gregory Shaffer* and Henry Gao** (Journal of International Economic Law, 2020) China is incrementally developing a new, pragmatic, decentralized model of economic governance through a web of finance, trade, and investment initiatives involving memoranda of understanding, contracts, and trade and investment treaties. 1 It combines private and public international law in transnational legal ordering imbued with Chinese characteristics. It builds from existing Western models, but it repurposes them. It uses law to help manage the risks to its outbound investment and trade. In the process, China could create a vast, Sino-centric, regional order in which the Chinese state plays the nodal role. This article explains how. The Chinese model for international economic law reflects a component of China’s internal development in the 2000s, which supplemented economic reform and liberalization with state-led infrastructure development. The approach starts with the financing of infrastructure through Chinese state-owned banks as part of China’s Belt and Road Initiative, involving telecommunications networks, roads, airports, and ports, which Chinese companies construct using Chinese standards. These projects enable China to export its excess capacity of steel, concrete, and other products. They also open new markets for Chinese products generally. They are supported by private law contract and dispute resolution.