China's overseas interests encompass four aspects: significant energy resources, extensive overseas infrastructure, extensive global trade and overseas investment, and traditional security for overseas citizens. In dealing with the conflict between the personal jurisdiction of the country of nationality and the territorial jurisdiction of the host country, as well as the contradiction between the equal status of sovereign states in international law but the disproportionate national strength and motives, the overseas security governance model should re-examine the influencing factors of the host country's (not) choice to cooperate with the mainland to protect overseas interests from the perspective of the host country's will. He also pointed out that the role of legal mechanisms in the security of the mainland's overseas interests should be strengthened, and the international discourse power and rule-making capacity should be further enhanced.
I. Introduction: Changes in the Connotation of Overseas Interests
The concept of protecting overseas interests has been constantly changing and enriching since modern times. Through foreign policy, it protects the security of sea lanes on which imports and exports depend, uses "soft power" tools, obtains information and intelligence, and combines the protection of its own national interests with the international system it has dominated in modern times, and defends its interests through new international economic and political organizations that are major members. In the 21st century, the main content of overseas interests has gradually shifted to focus on the actual material interests of overseas citizens and enterprises, such as the personal safety of citizens overseas and the property security of enterprises investing overseas.
In 2014, General Secretary Xi Jinping stressed at the Central Foreign Affairs Work Conference that "we must earnestly safeguard the mainland's overseas interests, continuously improve the ability and level of support, and strengthen protection." "During this period, as the scale of mainland enterprises going global increased and the investment trend intensified, the focus of overseas interest security began to gradually focus on enriching the means of protecting overseas interests, not just the personal and property safety of citizens abroad. At the end of 2020, China's outward investment stock reached US$2.5 trillion, 86 times that of 2002, climbing to the third place in the world's foreign direct investment stock. Protecting China's overseas interests has become a more urgent and realistic issue.
Essentially, in the process of integrating into the global economy, a country will face the problem of how to protect its overseas interests. In particular, as the size of the country's economy grows and the economic and trade cooperation with countries around the world deepens, more and more potential citizens and their property will be harmed. From the moment it crosses the territorial jurisdiction of a sovereign state, it is possible to create dangers in other countries or regions distant or adjacent to it, on the high seas, in the polar regions, and even in space, threatening the markets, resources and investments on which a country's economy depends. As a branch of national security, the security of overseas interests is divided by regional and national methods, but its content is complex.
In recent years, mainland policy and academic circles have paid more and more attention to the protection of China's overseas interests, and the academic community has divided the research path of overseas interests into narrow and broad senses. Chen Weishu summarized that the narrow concept refers to the security of the lives, assets and activities of Chinese institutions and citizens abroad, while China's overseas interests in the broad sense also include all valid agreements and contracts abroad that have interests with the Chinese government, legal persons and citizens, and the dignity, reputation and image that all Chinese officials and citizens outside the country should fairly obtain. Similarly, Liu Lianlian sorted out the different contexts of the security governance of the country's overseas interests, and referred to it as the security protection of foreign citizens and the construction of a new type of national interests, the former is the traditional territorial and personal jurisdiction conflict caused by the cross-border migration of nationals, and the latter is the change in the interest structure brought about by the change of the state's role in the international community.
However, both broad and narrow discussions have raised some questions: it is difficult to reach consensus at the international level on the political, strategic and cultural interests of security in the broad sense of overseas interests, and the need to enhance China's international presence by expanding its overseas political, strategic and cultural influence, and the narrow focus on the "legitimate overseas interests" of citizens and enterprises has also encountered new problems, such as which country's law? When there is no good and clear bilateral agreement between the relevant laws of the mainland against foreign sanctions and the local laws of the host country, how to solve the problem? Or, when the laws of the host country are not friendly to investment due to changes in the international political and economic situation, how can we talk about safeguarding legitimate rights and interests when the rules based on them have changed.
On November 18, 2021, the Political Bureau of the CPC Central Committee reviewed the National Security Strategy (2021-2025), emphasizing the need to strengthen the security protection of overseas interests, and in order to more effectively respond to the risks and challenges of overseas interests, the security of overseas interests has been incorporated into the overall national security concept, and together with food, resources, space, deep sea, polar regions and many other fields, it is an important part of the overall national security concept.
In the context of major changes unseen in a century, it is not difficult to find that the probability of China's overseas interests being infringed has further increased from both a strategic perspective and practical experience, so to discuss the security governance of overseas interests from the perspective of the overall national security concept, it is necessary to go beyond the broad and narrow sense, and adopt a problem-oriented and multidisciplinary approach to research, so as to shorten the significant gap between China's overseas interests protection needs and policies and capabilities.
2. Problem-oriented: the scope of China's overseas interests and the areas of security governance of overseas interests
This paper focuses on the functional type, especially the policy-based knowledge production, that is, the applied perspective of focusing on services and national social and public policies, and provides suggestions for the government and enterprises in public policy and investment decision-making by analyzing the various relationships between domestic and international, and tries to analyze why the host country is willing or unwilling to cooperate with the mainland to protect the mainland's overseas interests by summarizing the scope of China's overseas interests and sorting out the main areas of overseas interest security governance.
(1) The scope of protection of overseas interests
From the point of view of the urgent and necessary matters for the protection of the mainland's overseas interests, the scope of the protection of the mainland's overseas interests can be divided into four categories:
1. The first category of overseas interests is energy and key raw material resources
For example, about 85% of the mainland's oil imports need to be transported through the Strait of Malacca, and its dependence on important shipping lanes is obviously vulnerable; for example, the mainland's relations with major energy countries in the Middle East, including Saudi Arabia and Iran, are China's largest oil suppliers, and Turkmenistan, Kazakhstan, and Uzbekistan in Central Asia are all importers of China's natural gas. Corresponding Chinese oil companies operate in Iraq, Syria and other countries, etc. Heavy dependence on commodities and key raw materials, including timber, iron ore, and even food crops such as soybeans, is involved in rare minerals in Africa, Brazil and other places.
2. The second category of overseas interests is infrastructure construction and related investment
China has built extensive infrastructure, such as a vast rail network, including one that will connect Kenya's port cities of Mombasa, Uganda, Rwanda, Burundi, and South Sudan, a railway reconstruction linking Angola, Zambia, and the southeastern Democratic Republic of the Congo, a rail network connecting Addis Ababa and Djibouti, and Chad, as well as numerous airports, port and terminal facilities, water and fuel pipelines, natural gas liquefaction plants, and various highway upgrades. Well-known examples of this category of overseas interests include the Myitsone Dam in Myanmar, the development of the Aynak copper mine in Afghanistan, and the privatization of the Piraeus Port Authority in Greece, all of which pose significant threats to Chinese overseas investment.
The risk of benefits associated with infrastructure construction includes three stages: the first stage is the risk from the investment intention to the project start-up stage, if the host country's already determined decision changes, resulting in the interruption of project negotiations or the inability to recover the initial investment, and the second stage is the risk that the infrastructure project is in progress, such as the signed public-private cooperation agreement cannot be implemented in practice due to the covert obstruction of the local government, or the sudden increase in environmental protection standards by surprise legislation, The third stage is the risk of the completion of the project, such as war damage and unreasonable nationalization, resulting in the inability to move heavy assets, facing the natural risk of large investment volume and long return cycle. Infrastructure projects usually adopt a greenfield investment model, so they are closely linked to the national environment of the host country.
3. The third category is broad trade, non-infrastructure investment and related financial security
The security of overseas interests is not directly equal to the profits of all or a specific investment enterprise, and it cannot be said that the failure of investment in a certain project or enterprise (especially state-owned enterprises) means that the security of overseas interests has been violated. What is emphasized here is the label of China as a whole, and whether Chinese-funded enterprises with culturally significant attributes (but in the legal sense, they may be registered in the Cayman Islands, etc., and after the design of the multi-tier equity structure, they are already pure foreign legal persons) from the perspective of a certain region or country or from the perspective of industrial chain and supply chain, whether the overall business environment is safe, and whether it is unfairly discriminated against for the purpose of obstructing China's normal overseas trade and investment. Even if it appears to be normative at the level of international law or the domestic law of the host country. In addition, the high standards of the laws of the host country, such as the protection of workers' rights and interests, welfare benefits, environmental protection, etc., which are given by laws and policies, do not constitute an infringement of overseas interests - enterprises should operate in compliance and strive to improve their social responsibility, which is the proper meaning This is not because China's overseas interests have been violated, but because it does not attach importance to its overseas interests and does not protect them enough.
4. The fourth category involves Chinese citizens abroad
This includes not only the growing number of overseas Chinese, but also Chinese citizens who have studied and traveled abroad, as well as a large number of Chinese overseas workers.
(2) The field of security governance of the mainland's overseas interests
From a practical point of view, in view of the above four areas of overseas interests, the mainland has carried out security governance of overseas interests in the following typical areas in recent years:
1. For energy resources, the main approach is to the safety management of offshore routes
These include escorting merchant ships, maritime patrols, maritime hostage rescue, reconnaissance, and combat operations, including anti-surface, anti-submarine, and anti-air operations, to destroy threats to Chinese vessels. This is mainly a security management against pirates, but it is an effective deterrent to other maritime conflicts that may arise in the future. In this area, the mainland has demonstrated the largest and most mature military operation overseas, namely the Somali escort. From December 2008 to early 2015, the mainland deployed multiple rounds of anti-piracy operations in the Gulf of Aden, including more than 16,000 sailors, 1,300 marines and special operations forces personnel, and nearly 6,000 merchant ships. Some missions involved more than 30 ships of different plans and lasted up to six months. Chinese frigates have also rescued or assisted more than 60 civilian vessels that have been tracked or hijacked by pirates.
2. Governance related to the security of energy resources and the interests of infrastructure investment includes the following
(1) Peacekeeping operations: Peacekeeping operations are also part of the traditional security governance of overseas interests, mainly to ensure the internal security required by the mainland to carry out economic activities in a host country. Relevant tasks include patrolling, dispersing attacks, carrying out security duties, protecting critical installations, and supervising factional disarmament operations. Due to the political acumen of the task and the risk of fighting factions in the host country, the continent's involvement is usually in the form of sending personnel to United Nations peacekeeping forces, such as multilateral peacekeeping military operations in Timor-Leste, Haiti, Cambodia, etc. In addition, the mainland has also invested resources in these strategically valuable host countries to jointly build cooperation and jointly enhance the capacity to carry out peacekeeping operations.
(2) Counter-terrorism: includes tasks such as reconnaissance, surveillance, patrols, and special forces operations to eliminate terrorist personnel. Sometimes the host country chooses to act jointly with the mainland to combat rebel groups. China has conducted a number of exercises under the framework of the Shanghai Cooperation Organization (SCO) to enable military cooperation and coordination to counter "terrorist and extremist forces" and "coordinate and support each other" in "counterterrorism research, intelligence sharing, counterterrorism capacity building, joint counterterrorism training and personnel training." At the same time, the mainland is also seeking bilateral counter-terrorism cooperation outside the framework of the Shanghai Cooperation Organization.
(3) Humanitarian assistance and disaster relief work: This field includes the provision of emergency food, water and shelter, etc., showing the mainland's assistance to other countries and peoples, such as providing food, water, temporary housing and power generation equipment, naval hospital ships and other ways to participate in large-scale global rescue operations. For example, the mainland's clean water supply plan for Djibouti. Although this is not a direct way to protect China's overseas interests, it indirectly and long-term maintains the stable environment in the host country, and at the same time, it is of great significance as a country's international image building and fulfilling the call for a community with a shared future for mankind.
3. Asset security governance for infrastructure investment and other greenfield investment
Protecting infrastructure, plants, and other assets also remains a major security requirement. Relevant responsibilities include security duties, surveillance facilities, personal safety, and rapid response to the dispersal of criminal or insurgent attacks. Similar to personal security, the equipment involved in performing this task can be fairly basic. Similarly, this type of security can be provided by troops provided by the host country. For example, other countries are encouraged to provide local security in major infrastructure projects in which they participate, and special security companies are dedicated to protecting infrastructure projects related to Chinese investment.
4. Security governance for overseas citizens
This area of measures has been very familiar to the population in recent years, including State action in the event of an emergency: evacuation and the personal security of regular overseas citizens.
(1) Evacuation: Evacuation is also known as evacuation of non-combatants. The mainland has carried out a number of operations to evacuate overseas Chinese, including situations where major natural disasters or a sudden escalation of civil war could threaten Chinese citizens abroad. In response, the mainland government has demonstrated the ability to move large numbers of people quickly and safely, using any available civilian or military means. For example, the well-known evacuation of overseas Chinese from Libya and Yemen.
(2) Personal security of regular overseas citizens: generally refers to consular protection and cross-border police cooperation. The most basic and broad security governance task facing China is the need to protect the lives and safety of Chinese citizens living and traveling overseas. In order to carry out this mission, the preparations that the state needs to do include intelligence analysis to provide warnings of potential threats, route planning, and travel escorts. Citizens or businesses with more resources can choose to hire people to act as bodyguards. Individuals responsible for personal safety work need a reliable communication system and means of transportation. For more demanding tasks, more sophisticated surveillance systems and small self-defense weapons may be required. In some cases, it is possible to rely on the security forces provided by the host country, which offer the most convenient and politically low-profile option, but the reliability and effectiveness of this option vary from country to country.
In practice, the mainland has developed a variety of ways of cooperation with the host country for consular cooperation. In order to provide more reliable security, hiring overseas security companies has become a viable option for many businesses and some travelers, but these security companies offer limited protection due to domestic restrictions prohibiting the use of firearms.
5. Where it is related to trade, non-infrastructure investment, financial security, etc., international law, institutional norms, and other methods are generally employed to carry out security governance
The above distinction is made between the legitimate rights and interests of individual investors and the overseas interests of China as a whole, and the operational risks that overseas enterprises need to bear are two parts that intersect with China's stability in the field of overseas economic activities. Generally speaking, it is very important for enterprises to do their own risk assessment and prevention, fulfill their obligations to comply with the laws of the host country, and do a good job of their own compliance. In addition, the use of international law, trade rules such as the WTO, bilateral investment treaties, state-investor dispute settlement mechanisms, overseas investment insurance, such as the use of multilateral investment guarantee agencies, etc., are all traditional ways to protect the rights and interests of investors in the field of international economic law.
However, in recent years, as China's overseas interests continue to expand, more countermeasures and the creation of blocking and anti-sanctions laws have become new ways of governance in the security governance of overseas interests. For example, Zhao Jun and others discussed how to use the offensive and defensive strategies of domestic law to conduct international legal battles, and Yang Chengyu reviewed how France countered the long-arm jurisdiction of the United States by reshaping its economic sovereignty. It is foreseeable that the relevant legal warfare will become an important component of China's overseas interests security governance in the new era, with the international rule of law as the guarantee, the power of the rule of law to defend the mainland's overseas interests, enhance the mainland's international rule of law discourse, and enhance the credibility and influence of the mainland's international system, which corresponds to the adjustment and maintenance of the mainland's interests in the transformation of the role of the international community in the connotation of overseas interests.
Table 1 Scope of protection of China's overseas interests and areas of security governance
III. Security Governance Model for Global Overseas Interests: From the Perspective of the State of Nationality or the Host State?
At the present stage of the development of the international community, countries around the world are not the same in developing and safeguarding their overseas interests on a global scale. Some scholars have observed that the protection of a country's overseas interests is constrained by the three forces of power, ability and motivation, and that most countries cannot achieve a sustainable balance, so the state (or the country of nationality) will face three major dilemmas in the protection of overseas interests: effectiveness, cooperation and jurisprudence. In reality, countries' ability to implement, resources, willingness and concrete implementation policies are all important factors.
(1) Protection of overseas interests from the perspective of the country of nationality
Different countries have different endowments, different relationships with host countries, and different international environments at different times, so different paths have been formed for the security governance of overseas interests. In order to solve this problem, Xiao He starts from the perspective of the country of nationality and the country of nationality of overseas interests, and divides the measures into four basic types according to the level of coercion and the subject of action, including diplomatic protection, legislative compulsion, host country dominance, and security aggregation. The diplomatic protection type proceeds from the State of nationality, is highly coercive, and follows the logical path of "sovereignty confrontation", which is mainly at the discretion of the executive branch. Another type of nationality is the legislative coercion type, which replaces administrative discretion with domestic law, often covering "long-arm jurisdiction" or "extraterritoriality". In contrast, the host country-led model mainly uses consular protection, diplomatic negotiations, and other low-coercive measures, and the willingness and ability of the host country to determine the results. Security aggregation is a pluralistic, localized approach to protection that protects overseas interests primarily through commercial and social activities within the framework of less coercive international law.
Since the 21st century, the mainland has gradually increased the number of highly coercive and highly administrative overseas operations under the authorization of the United Nations, such as escort operations in Somalia and the Gulf of Aden, United Nations peacekeeping operations, anti-terrorism operations, etc., as well as large-scale evacuation operations that the public is familiar with in recent years. In 2021, after proposing the coordinated development of domestic rule of law and foreign-related rule of law and making full use of international rules to fight legal battles, the legislative coercion type has also attracted more and more attention from international law scholars. With the continuous growth of the mainland's comprehensive national strength, especially in response to the endless emergence of special international drafts or domestic laws of the host country, the main direction in the future is to fully develop the highly coercive governance model led by legislation and give full play to a variety of security aggregation methods.
(2) From the perspective of the will of the host country
The previous part explored the security governance model of overseas interests from the perspective of the State of Nationality, but this is not sufficient to answer the question of whether the host State is willing to choose to cooperate with the State of Nationality to protect its overseas interests, when and under what circumstances is the host State inclined to cooperate, and when does it refuse?
Why should the will of the host State be an important issue of study? not only because the host State, as one of the two actors, has an important influence on the State of nationality. Rather, it is based on the changes in international relations and the core cornerstone of the history of the development of international law. Therefore, this article discusses from the perspective of the intersection of international law and international relations:
Since the security of overseas interests is divided by country, the recognition of national sovereignty and territory is a prerequisite. In the past, international law has taken on the characteristics of "a strong country is law" and "power is truth", and it is just to manage and conquer weak countries through force. Therefore, the effectiveness of the protection of overseas interests depends entirely on the strength of the State of nationality, and the will of the host State is not important.
With the development of international law, states no longer have the right to conquer or administer other countries, and more attention is paid to emphasizing the obligation of mutual respect for territorial sovereignty between states, and the independence and equality of state sovereignty has become a basic principle. Thus, the overseas interests that extend from the personal jurisdiction of the State of nationality — which includes both the very obvious consular protection of its own citizens on the basis of personal jurisdiction and the consequential legal form of corporations of the State of nationality abroad, i.e., the investment property of its own citizens—are in fact within the territorial jurisdiction of the host State. Thus, the first pair of conflicts emerges, and if respect for the principle of State sovereignty is the cornerstone of modern international law, how to deal with the conflict between the personal jurisdiction of the State of nationality and the territorial jurisdiction of the host State?
Correspondingly, from the perspective of international relations, if a country does not have frequent foreign exchanges, it will not be able to produce realistic conditions for the protection of overseas interests. It is precisely because of the rapid development of globalization that the in-depth economic and trade exchanges between countries, the frequent personnel exchanges, and the close division of labor and cooperation in the global industrial chain have formed a similar effect to the global village. The emergence of national overseas interests is a product of globalization, and the uneven nature of globalization determines that the main bodies that urgently need to protect overseas interests are those large countries with large overseas assets and strong comprehensive national strength. On the one hand, the strong and the weak countries are given the same status in international law, and on the other hand, the weak and small countries are indeed not the main body of the demand for the protection of overseas interests, and how to deal with the relationship between the strong and the weak countries, and the relationship between the big and the small countries, and reach an agreement between the two sovereign states, is also an important issue to be faced in the protection of overseas interests. Therefore, it is not enough to discuss how to govern the security of its overseas interests from the perspective of the country of nationality, but it is necessary to see the other side of the matter, that is, under what circumstances is the host country willing to cooperate with the country of nationality to protect it?
Factors influencing whether the host country chooses to cooperate with the country of nationality
Guzmán used the theory of rational choice in international relations to explore how international law works, and he found that there are three main reasons why states enter into international agreements or are willing to abide by international law: reputation, reciprocity, and retaliation, and he emphasized: (1) A country's reputation for complying with legal obligations consists of judgments about the state's past behavior and predictions of future compliance based on that behavior. A good reputation is valuable because it makes the commitment more credible and, therefore, makes future cooperation easier and less costly. (2) Reciprocity is an adjustment of a country's behavior, motivated by the desire to maximize the country's returns based on new circumstances or information. If a country violates its commitments, other countries may withdraw their own compliance with international agreements in response to the violation. (3) Retaliation is to punish the offending party. Retaliatory actions may include economic, diplomatic, or even military sanctions.
Based on the three elements, this paper proposes three aspects that affect the cooperation between the host country and the country of nationality for the protection of overseas interests: (1) reputation, (2) incentive mechanism, and (3) consequences of violation.
Figure 2 Three factors of the host State's (un)willingness to cooperate with the State of nationality to protect its interests abroad
(1) Incentive mechanism: the decisive factor
First of all, let's start with the most important and core incentive mechanism. The reason why the incentive mechanism is used instead of reciprocity is that in the relationship between the country of nationality and the host country, in addition to the part of mutual benefit and reciprocity, there are also comparisons in various aspects such as interests and needs, and only when a sufficiently large incentive for cooperation is formed, the host country's willingness to cooperate will be enhanced; if the incentive for cooperation is much higher than the incentive for cooperation, then the host country is naturally inclined to not cooperate, or even infringe on the overseas interests of the country of nationality. According to the classical theory of Douglas North in institutional economics, institutional arrangements with self-enforcing capacity can be sustained, and the willingness of both parties to the contract to self-execute depends on the incentive mechanism.
1. The interests of the State of nationality and the host State are mutually compatible
The most obvious in the incentive mechanism is that the development interests of the host country and the overseas investment (or construction) interests of the country of nationality are mutually compatible. For example, Costa Rica in Central America has long been recognized as a model country for environmental protection and green development, and the Colombian government announced as early as 2007 that it will become the first country in the world to achieve carbon neutrality by 2021, and in 2021, UNESCO officially awarded its capital "zero carbon goal" award in recognition of its efforts in combating climate change and achieving carbon neutrality. On the one hand, Costa Rica is one of the few countries in Central America that has close ties with developed regions and international organizations, and has been trying to gain international influence by breaking its predicament of being dominated by the neoliberal economic framework through positive environmental governance results. On the other hand, due to environmental protection and various factors, Costa Rica's national public debt has increased dramatically, making it one of the countries with the highest per capita debt in the world. The World Bank and the International Monetary Fund (IMF) have proposed three rounds of structural adjustment plans to Costa Rica, which has encouraged the country to attract foreign direct investment, but the economic development brought about by Western overseas investment has exacerbated income inequality and triggered political and social unrest. Colombia has long struggled between development and environmental protection, trying to break the West's dominance through environmental governance and developing its economy to promote social stability. Colombia is the world's largest exporter of fresh pineapples and the third largest exporter of bananas, and the majority of its population is engaged in agricultural production. In 2013, China and the country signed a series of cooperation agreements. Among them, the establishment of the "China-Latin America Joint Research Center for Agricultural Science and Technology and Jianghuai Biotechnology Co., Ltd. (Costa Rica) Agricultural Free Trade Zone", in which the mainland agricultural company undertook the test demonstration of excellent varieties and carried out joint research and development of seeds, which achieved good economic benefits and promoted the growth of local farmers' income. Obviously, the path of investment cooperation adopted by the mainland is in line with the national interests of the host country and the interests of the local people. Through the development of organic agriculture, it not only maintains the requirements of green environmental protection, but also strives to solve the problem of economic development and promote the increase of farmers' income, which is in line with the local governance model, enriches the practice of a community with a shared future for mankind, and forms a docking of the development paths of the two countries.
2. The most important factor in the incentive mechanism: the challenge of domestic political governance in the host country
However, in relations with host countries, it is not always possible to maximize the convergence of interests between the two parties. For example, when the economic downturn and de-globalization trend are obvious or the nationalist sentiment in the host country is on the rise, what are the core factors in the incentive mechanism? Wang Jisi pointed out that the most important factors affecting the relationship between the two countries are their domestic policy agendas and governance challenges, which affect the direction of the bilateral relationship. When countries are confronted with major domestic political agendas and challenges, foreign policymaking will focus more on how to serve the needs of domestic politics.
When a large number of infrastructure construction enterprises go to Africa for direct investment, they bring a large number of laborers, including a large number of semi-low-end skilled workers, with high work efficiency, no cultural barriers, easy management, and ensure the construction period. However, this has sparked social discontent in some host countries, which believe that the rights and interests of local workers are undermined, their job opportunities are encroached upon, and local employees are not trained in depth. The incentive to attract FDI has forced debates over countries weakening each other's labour standards and employment protection rules. Some studies have pointed out that whether or not a Chinese-invested enterprise chooses to send a large number of overseas workers depends largely on the institutions and systems of the host country, especially in countries with a developed system of collective labor rights, which will cause Chinese enterprises to reduce the number of overseas workers. In such a country, where local workers are capable of collective struggle, and a large number of trade union movements offset the low costs of the high efficiency of Chinese overseas workers, it will increase the local operating costs, especially political costs, for Chinese companies. The host government needs to pay special attention to the attitudes of local workers, because local employees are also voters, and too many strikes and protests can threaten the legitimacy and stability of the host government's regime. On the one hand, Chinese companies are not good at dealing with foreign trade unions, and on the other hand, the Chinese government also needs to take into account maintaining the stability of relations between the two countries. Therefore, in these African countries, Chinese companies will take the initiative to reduce the dispatch of overseas workers. Countries with weaker rights and systems for the protection of workers' rights are more tolerant of overseas workers, partly because local workers are unorganized and unable to make trouble, and on the other hand, host countries are more concerned about the completion of investment projects. When looking at each micro project, it is not difficult to find that the success of each successful or failed overseas energy resources and infrastructure project has a lot to do with whether the host country has sufficient, ingenious and sophisticated incentive mechanisms.
3. Other influencing factors in the incentive mechanism: Who is the strong party in the project?
Generally speaking, host countries that have accepted Chinese overseas investment are generally positive, otherwise they will stop projects or block investments for various reasons, such as national security review provisions. At the micro level, however, the balance of power between the host and the country of nationality, the degree of demand for the potential benefits of the investment, and so on, can lead to changes in the relationship between the two sides.
Especially in greenfield investment, it is easier for the host country to gain a strong position and gain the initiative in bargaining. For example, when host countries find themselves diversified in the source countries of foreign investment, the more new home countries come in, the more external options and more room for policy manipulation for the host countries, which are already developing countries, to use their agenda-setting powers and to impose more conditions on investor screening, thereby enhancing their national capacities. However, the mainland is forced by the huge demand for energy or resources, and some investment projects are even mandatory, so it appears to be somewhat passive, and the initial reduction of bargaining power will naturally increase the challenge to the subsequent protection of overseas interests.
Another example is that in infrastructure construction projects, the internationally accepted public-private partnership (PPP) model is often adopted, and this kind of project with a long payback period will gradually increase the strong position of the host country over time. For example, in the middle of the project, the government said that in the preliminary feasibility study stage, due to the falsification of data by government officials, it has been verified, and the follow-up part paid by the government will not be paid; or the government says that due to the change of officials, the argumentation at that time was not very scientific, so it is now required to slim down or stop the project; or there are changes in the laws and policies of the host country, and the contracts signed before are not recognized, or the central government announces that the local government has misunderstood and applied the law, and its government behavior is not in compliance, and so on. In addition, some developing countries have weak government functions and have adopted a political structure that is very dependent on the will of the voters, and the government is very welcoming to Chinese investors in the early stage, and the government of the host country wants to promote the project but has no management ability and no financial resources, and has to take into account the will of the people, so it is very inclined to dump the things that are originally within the scope of the government's functions to Chinese-funded enterprises. For example, when a project is attached to municipal greening construction, hospitals, educational institutions, railway operations, etc., when Chinese-funded enterprises need to undertake too many public service functions, and the investment is getting deeper and deeper, and the returns are becoming more and more slim, it is not simply a problem of poor management, but a real damage to overseas interests. Even if sufficient incentives are provided in the interests of the host country, the negative incentives given by other countries are too large to influence the host country's decision-making.
(2) Consequences of violation: no or insufficient deterrence
Another important factor influencing the host country's choice to protect China's overseas industries or interests is the consequences of non-compliance. This is usually done at both the legal (or agreement) level and diplomatic.
1. Legal aspects
The legal aspects include: first, in a multilateral situation: the mainland's ability to use existing international rules is not strong or unfavorable, especially in the field of trade, and the protection of its own overseas interests is insufficient; second, in the bilateral situation, when there is an opportunity to negotiate a specific agreement with the host country, too little or even no is discussed, leaving a lot of room for the host country to choose how to deal with Chinese projects; and third, when it comes to the relevant domestic legislation of the host country, it has a weak sense of risk, turns a blind eye, and does not know how to deal with it.
In the multilateral context, according to the statistics on the official website of the WTO, in the more than 20 years from 1995 to 2019, a total of 5,944 anti-dumping investigations were initiated by various members, of which 1,392 were against China, an average of 56 per year. A quarter of global anti-dumping cases are initiated against China. However, in contrast, according to the report of the Ministry of Commerce, the mainland has initiated a total of 262 anti-dumping investigations and 17 countervailing investigations since its accession to the WTO until November 2021 (the WTO statistical method is used here, and if the Chinese statistical method is used, the number is less than half). Obviously, the mainland's ability to apply the WTO's trade remedy investigation rules is significantly weaker. Anti-dumping, anti-subsidy, and safeguard measures are all non-tariff protection measures, which are legitimate measures under the WTO framework that allow member countries to protect their domestic interests.
Some scholars have pointed out that China has not been able to gain an advantage and dominance in the formulation of global digital trade rules. In the e-commerce negotiations, firstly, the mainland has proposed limited reform proposals to lower market access barriers to digital trade, while the European and American countries have proposed a series of measures, such as expanding the Information Technology Agreement (ITA), setting substantive market access restrictions, and implementing non-national treatment. Finally, there are also many disagreements within other countries over the formulation of rules for digital transactions, and the mainland has failed to win the maximum rights for itself.
In the bilateral field, when the mainland has the opportunity to negotiate with the host country on how to treat the interests of overseas investment, the mainland's ability to use legal tools still needs to be improved. The purpose of negotiating the relevant legal framework with the host country is that it expresses the parties' views on the distribution of proceeds while remaining technical enough to allow for a wide range of intermediate solutions. Through the interpretation and application of technical legal vocabulary, politics itself is transcended and is presented in a more effective and shareable way of discussing and resolving differences. However, there is still a lot of room for improvement in this area, and the relevant enterprises are not very good at or are not suitable for directly expressing their demands to the host country under a similar mechanism.
At the level of the domestic law of the host country, the mainland does not have a deep observation of the domestic industrial legislation and investment policies of other countries, is not highly sensitive, and does not take many countermeasures. When companies investing in their home countries face the host country's welcome but reluctant to protect investors – this has become an important signal and trend of de-globalization. In Brazil, for example, in recent years, domestic investment-related legislation in Brazil has shown the following characteristics: (1) less use of legislation to directly restrict foreign investment in strategic sectors, and more likely to strengthen the supervision of investment operations by regulators, and use legislation with a lower level of effectiveness to ensure that Chinese companies comply with local laws, (2) through government functions such as the Administrative Council for Economic Protection, which have the power to analyze and prevent mergers and acquisitions that threaten fair competition and prevent the formation of cartels, (3) the flexible application of national security provisions, and a common feature of most measures is the use of vague thresholds and broad definitions of critical infrastructure, which provides room for restrictions to be imposed on grounds other than national security. By designing a new model of cooperation and facilitation of investment agreements, Brazil has a different preference for investment and for investors, emphasizing that its legal mechanisms are to promote investment rather than protect it. At the multilateral level, the lack of creativity of international rules, the lack of constraints on the host country at the bilateral level, and the lack of attention to the domestic law of the host country have all made it impossible to violate the consequences of the host country at the institutional level, and the influence is insufficient, posing a hidden danger to the security of the mainland's overseas interests.
2. Diplomatic dimension
At the diplomatic level, the mainland's foreign policy toolkit also does not seem to be rich enough. Since the founding of the People's Republic of China, the mainland's foreign policy tradition has always advocated non-interference in the internal affairs of other countries as a key principle of foreign policy. As part of the Five Principles of Peaceful Coexistence, we pledge not to impose our will on other countries and to minimize their military presence abroad. So how to deal with the growing overseas interests that are constantly facing new problems and threats on the basis of the Five Principles of Peacekeeping Coexistence? How to deal with the effective connection between the "principle of non-interference" and the protection of China's overseas interests is a challenge.
(3) Reputational factors
The influence of reputation factors on the willingness of host countries to cooperate is as follows: first, some developing countries have weak governance capabilities, high debts, and frequent changes of host governments. If reputational measures operate too small at the margins to affect state behavior at all. For example, in the sixties and seventies of the twentieth century, many newly independent countries chose to confiscate the assets of foreign investors, and the decision to expropriate could be seen as a decision to extract current value at the expense of future reputation. Knowing that their policies have made it unlikely that there will be a large inflow of foreign investment in the future, the decision to impose it is much less costly. There is little value in complying with the rules of customary international law that many States consider to be customary international law (prohibiting expropriation without prompt, adequate and effective compensation), since the reputation of compliance in the field of investment is unlikely to generate a substantial increase in investment at the margin. Expropriation is expressly prohibited in BITs when there is a strong need for foreign investment in the host country, unless it is for public purposes and (usually) with prompt, adequate and effective compensation. In this case, the signing of a treaty is an act of reputational commitment by the host country, so that the host country has a greater incentive to avoid expropriating or otherwise treating investors in a manner that violates the relevant treaty. Second, the value judgment of reputation itself, which involves the issue of the right to speak in the international community.
By analysing the incentives mechanism, the consequences of the violation and the reputational factors, the host country is (not) willing to cooperate in the project in order to cooperate with it to protect its overseas interests. The complexity of these factors also fully illustrates the difficulty of the security governance of overseas interests.
epilogue
In the period of the rise of globalization, the mainland has fully integrated into the global industrial and supply chains, carried out close cooperation with many countries, increased economic and trade exchanges and strategic investment, put forward the "Belt and Road" initiative, and strengthened connectivity, which is of great practical significance. This topic will continue to develop along with the growth of China's national strength and changes in international relations, and there will be more adequate and effective means and measures to enrich the practice of protecting overseas interests. Fundamentally speaking, whether it is the personal and property security of citizens or enterprises, or the strategic interests of the whole under the overall national security concept, it will be accompanied by the contradiction of governance power between countries due to the imbalance of comprehensive strength and conflicting interests. The existing system of international law had not departed from the principle of State sovereignty, and the conflict and overlap between the personal jurisdiction of the State of nationality and the territorial jurisdiction of the host State had not been alleviated. Therefore, it is necessary to design an effective mechanism for the protection of overseas interests from both a legal perspective and a multidisciplinary perspective such as international relations.
As a major economic and populous country, China is not yet a "power" recognized by the international community in international law, and how to create a theoretical system in the field of security governance of overseas interests in the future, rather than just sticking to specific measures, is a particularly important issue. In particular, how to properly deal with the various factors that affect the will of the host country and effectively connect with the protection of China's overseas interests is a key issue. At the same time, how to respond to the changes in the pattern of international governance, put forward positive, constructive and innovative international rules, and gain broad recognition from the international community, so as to achieve both compliance with international law norms and moral legitimacy, and achieve the dual effect of enhancing international discourse and international image, is also an important part of the security governance of overseas interests in the future.