Natasha Kang is a senior at the University of California, Davis.
China, the fastest-growing economy in the world,  was already made headlines four years ago in 2010 when it overtook Japan as the world’s second-largest economy.  It took another leap forward when the International Money Fund declared China as the world’s largest economy in late 2014 as it overtook the United States. Of course, this is just in terms of purchasing power (the amount of goods and services that can be purchased), as China still has ways to go before surpassing the US in raw terms.  This development bears much value, as a bilateral investment treaty with China now takes more priority than ever before.
According to the United Nations Conference on Trade and Development, a bilateral investment treaty (BIT) is an agreement “between two countries for the reciprocal encouragement, promotion, and protection of investments in each other's territories by companies based in either country.”  BITs act as tools to break down market access barriers by setting terms and conditions for foreign investment while giving foreign investors special rights and legal protections. These substantial protections include foreign companies being treated as favorably as local ones, letting investors transfer funds in and out of a host country using the market exchange rate, and even limiting host governments from adopting inefficient practices that may harm trade. In addition, BITs give investors the right to submit an investment dispute with the government of the host country directly to international arbitration. 
In regards to the dispute settlement provision, a BIT would mean that American investors would be able to turn to a neutral, third-party arbitrator when problems with another investor or the Chinese government arise. This provision of a BIT is usually found especially useful for investors in countries where the legal system is not mature or well established. .
Such an influential BIT surely has implications beyond projected economic improvement for the countries. This proves to be true, as the thousands of BITs in existence are believed by many scholars to influence customary international law, which pertains to obligations from established state practice, rather than obligations arising from formally written treaties . BITs contribute to this field of law by consolidating existing rules of custom in international investment law. From this investment protection, BITs may add to the solidification of new rules in customary international law in the future . Depending on the results of negotiation, this US-China BIT could set new examples for how countries with heavy restrictions on foreign investment structure BITs.
Negotiations for this BIT between the United States and China have been underway since 2008. So far, it has been decided that China will agree to a “negative list” approach, where it will allow foreign investment in all industries and sectors except those which it specifically indicates. Furthermore, China has shown a willingness to allow non-discriminatory access to its market at all stages of investment.  From here on, the two countries will have their work cut out to pave the way for the future of their economic engagement.
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 Kevin Hamlin & Li Yanping, “China Overtakes Japan as World's Second-Biggest Economy,” Bloomberg, August 16, 2010, http://www.bloomberg.com/news/2010-08-16/china-economy-passes-japan-s-in-second-quarter-capping-three-decade-rise.html.
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 What are BITs?, United Nations Conference on Trade and Development, http://www.unctadxi.org/templates/Page____1006.aspx.
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 Patrick Dumberry, “Are BITs Representing the “New” Customary International Law in International Investment Law?,” Kluwer Arbitration Blog, September 2, 2009, http://kluwerarbitrationblog.com/blog/2009/09/02/are-bits-representing-the-%E2%80%9Cnew%E2%80%9D-customary-international-law-in-international-investment-law/.
 Marney Cheek, “Why A U.S.-China Bilateral Investment Treaty Matters,” Investment Policy Central, http://www.investmentpolicycentral.com/content/why-us-china-bilateral-investment-treaty-matters.
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