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The Pervasive Problem of Special Economic Zones for International Economic Law: Tax, Investment, and Trade Issues

Published online by Cambridge University Press:  29 May 2020

Julien Chaisse Open the ORCID record for Julien Chaisse [Opens in a new window]  and
Xueliang Ji Open the ORCID record for Xueliang Ji [Opens in a new window]
Julien Chaisse*
Affiliation:
School of Law, City University of Hong Kong and Hong Kong Commercial and Maritime Law Centre
Xueliang Ji*
Affiliation:
Faculty of Law, Chinese University of Hong Kong and Asian Academy of International Law
*
*Email: julien.chaisse@cityu.edu.hk
**Email: xueliang.ji@link.cuhk.edu.hk
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Abstract

Special Economic Zones (SEZs) have been a huge success and brought a great number of benefits to the whole world. With different kinds of incentives, SEZs have created favorable conditions in order to attract foreign investors. In this article, several specific issues are considered. First, whether SEZs are legal under international economic law (IEL). Second, what kind of specific issues they raise under IEL. Thirdly, what measures governments can take in order not to be challenged. The first section illustrates the definition of SEZs and their rapid development; the second section will consider the interaction between SEZs and international tax law, especially the base erosion and profit shifting (BEPS) Action 5; the third section focuses on the relationship between SEZs and investment agreements and the disputes raised as a consequence; the fourth section will talk about SEZs and the World Trade Organization (WTO), as some incentives used by SEZs may not be compatible with WTO regulations. The article shows that SEZs can be harmful. For one thing, tax incentives applied in SEZs may lead to tax evasion, and the competitive circumstances between states may be changed. For another thing, the frequent changes of policies in SEZs may result in indirect expropriation, and investor-state arbitration under investment treaties can be used by foreign investors to protect their SEZ-related benefits. In addition, although WTO rules do not explicitly regulate SEZs, a number of measures, such as subsidies, do fall under the ambit of WTO rules, and these measures cannot be discriminatory.

Keywords

SEZstaxationBEPSBITsexpropriationWTOSCM Agreementsubsidies
Type
Research Article
Information
World Trade Review , Volume 19 , Issue 4 , October 2020 , pp. 567 - 588
Copyright
Copyright © The Author(s), 2020. Published by Cambridge University Press

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41 Creskoff and Walkenhorst, ‘Implications of WTO Disciplines’.

42 Engman et al., ‘Export Processing Zones’, 10.

43 Ibid.

44 Creskoof and Walkenhorst, ‘Implications of WTO Disciplines’, 8.

45 Nkiruka Chidia Maduekwe, ‘Legal Regime for Oil and Gas Free Trade Zone’ (Nigerian Institute of Advanced Legal Studies 2016), 5.

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51 Partha Mukhopadhyay and Kanhu Charan Pradhan, ‘Location of SEZs and Policy Benefits: What Does the Data Say?’, CPR Occasional Paper Series No. 18 (2009), 70.

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53 Thomas J. Sigler, ‘Panama's Special Economic Zones: Balancing Growth and Development’, Bulletin of Latin American Research 33 (2014): 2.

54 For an overview of SEZs as a specific industrial policy tool, see Sherzod Shadikhodjaev, Industrial Policy and the World Trade Organization: Between Legal Constraints and Flexibilities (Cambridge University Press, 2018).

55 Engman et al., ‘Export Processing Zones’, 17.

56 Wei Ge, ‘Special Economic Zones and the Opening of the Chinese Economy: Some Lessons for Economic Liberalization’, World Development 27 (1999): 51.

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58 Aguaytia Energy, LLC v. Republic of Peru, ICSID Case No. ARB/06/13.

59 A. M. Moreno Romo, ‘China's Special Economic Zones: Are They Still “Special” after China's Accession to the WTO?’ (Doctoral dissertation 2009), 96.

60 Moberg, The Political Economy, 124.

61 Creskoof and Walkenhorst, ‘Implications of WTO Disciplines’, 7.

62 Gold Reserve Inc. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/09/1.

63 Edward M. Graham, ‘Do Export Processing Zones Attract FDI and its Benefits?’, International Economics and Economic Policy 1 (2004): 87–103, 94.

64 Rothenberg et al., ‘When Regional Policies Fail’, 2.

65 Foreign Investment Advisory Service (FIAS), Special Economic Zones.

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70 World Bank, Export Processing Zones in Sub-Saharan Africa (Economic and Social Policy Findings 193) (The World Bank, Washington DC 2001).

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73 Moberg, The Political Economy, 125.

74 Edward M. Graham, ‘Do Export Processing Zones Attract FDI and its Benefits?’, International Economics and Economic Policy 1 (2004):, 87–103.

75 Moberg, ‘The Political Economy’, Chapman Law Review 420.

76 Farole, Special Economic Zones in Africa, 204.

77 Ibid.

78 Moberg, ‘The Political Economy’, Chapman Law Review, 420.

79 Ibid.

80 Farole, Special Economic Zones in Africa, 219.

81 Ibid., 211–212.

82 Moberg, ‘The Political Economy’, Chapman Law Review, 420.

83 Ibid., 420–421.

84 Ibid., 421.

85 Peter, G. Warr, ‘Export Processing Zones: The Economics of Enclave Manufacturing', The World Bank Research Observer 4 (1989): 65–88; Beth Mitchneck, ‘An Assessment of the Growing Local Economic Development Function of Local Authorities in Russia’, Economic Geography 71 (1995): 150–151.

86 Moberg, ‘The Political Economy’, Chapman Law Review 420.

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88 Hyung-Gon Jeong and Douglas Zhihua Zeng, ‘Promoting Dynamic & Innovative Growth in Asia: The Case of Special Economic Zones and Business Hub’, Korea Institute for International Economic Policy Research Paper Policy Analysis-16-01 (2016); James Alan Brown, ‘Territorial (In) Coherence: Labour and Special Economic Zones in Laos's Border Manufacturing’, Antipode 51 (2019): 440.

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90 Tom W. Bell, ‘Special Economic Zones in the United States: From Colonial Charters, to Foreign Trade Zones, toward USSEZs’, Buffalo Law Review 64 (2016): 982.

91 Mitchneck, An Assessment, 150–51.

92 Ernst and Young, Doing Business in China (Ernst & Young International, Ltd. 1994), 27–28.

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96 Carter and Harding, Special Economic Zones, 64.

97 China Law No. 466, Arts. 1–3.

98 Jeong and Zeng, ‘Promoting Dynamic’.

99 Peter, G. Warr, ‘Export Processing Zones: The Economics of Enclave Manufacturing', The World Bank Research Observer 4 (1989): 65–88.

100 Peter, G. Warr, ‘Malaysia's Industrial Enclaves: Benefits and Costs’, The Developing Economies 25 (1987): 30–55.

101 Laura Bloodgood, Competitive Conditions for Foreign Direct Investment in India (ITC Publication No. 3931) (Washington, DC: Office of Industries, United States International Trade Commission, 2007), 60, http://digitalcommons.ilr.cornell.edu/key_workplace/389/ (accessed 14 February 2019).

102 Ibid.

103 Tarun Dhingra et al., ‘Location Strategy for Competitiveness of Special Economic Zones: A Generic Framework for India’, Competitiveness Review: An International Business Journal 19 (2009): 272–289.

104 Jeong and Zeng, ‘Promoting Dynamic’.

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106 Laukkanen, ‘The Development’, 152.

107 Howell H. Zee et al., ‘Tax Incentives for Business Investment: A Primer for Policy Makers in Developing Countries’, World Investment 30 (2002): 1498.

108 Ibid.

109 Klemm and Parys. ‘Empirical Evidence’.

110 Yotam Margalioth, ‘Tax Competition, Foreign Direct Investments and Growth: Using the Tax System to Promote Developing Countries’, Virginia Tax Review 23 (2003): 189.

111 R. Altshuler and T. J. Goodspeed, ‘Follow the Leader? Evidence on European and US Tax Competition’, Public Finance Review 43 (2015): 486.

112 C. Azémar and A. Delios, ‘Tax Competition and FDI: The Special Case of Developing Countries’, Journal of the Japanese and International Economies 22 (2008): 89.

113 Ibid.

114 R. Biçer, ‘An Assessment of Free Trade Zones from a Transfer Pricing Perspective’, International Transfer Pricing Journal. 15 (2008): 236.

115 Margalioth, ‘Tax Competition’, 189; Ifeoma Betty Ezike et al., ‘Free Trade Zones: A Strategic Evaluation of Nigeria Success (Failure) Story’, Journal of Management and Economic Studies 1 (2019): 66.

116 Lotta Moberg, ‘The Political Economy of Special Economic Zones’ (Lund University, Sweden, 2010), 7.

117 Julien Chaisse and Xueliang Ji, ‘“Soft Law” in International Law-Making: How Soft International Taxation Law is Reshaping International Economic Governance’, Asian Journal of WTO and International Health Law and Policy 13 (2018): 469; Joint Comm. on Taxation, Background, Summary, and Implications of the OECD/G20 Base Erosion and Profit Shifting Project (2015), 9, www.jct.gov/publications.html?func=startdown&id=4853 (accessed 17 February 2019); Michelle Andrea Markham, ‘Arbitration and tax treaty disputes’, Arbitration and Tax Treaty Disputes 35 (2019), 3.

118 Organisation for Economic Co-operation Development [OECD], Background Brief: Inclusive Framework on BEPS (2017), 9, www.oecd.org/ctp/background-brief-inclusive-framework-for-beps-implementation.pdf (accessed 17 February 2019).

119 Julien Chaisee and Xueliang Ji, ‘Soft Law in International Law-Making: How Soft International Taxation Law in Reshaping International Economic Governance’, Asian Journal of WTO and International Health Law and Policy 13(2) (2018): 493.

120 OECD, ‘Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5-2015 Final Report’, OECD/G20 Base Erosion and Profit Shifting (OECD Publishing, Paris 2015), 11.

121 OECD, ‘Countering Harmful Tax Practices’, 19.

122 Farole, Special Economic Zones in Africa, 17.

123 OECD, ‘Countering Harmful Tax Practices’, 20.

124 Laukkanen, ‘The Development’, 162.

125 ‘The Geographical Designation of Special Economic Zones’, TIPS Working Paper (2014), 3.

126 OECD, ‘Countering Harmful Tax Practices’, 20.

127 Ibid.

128 Farole, Special Economic Zones in Africa, 17.

129 OECD, ‘Countering Harmful Tax Practices’, 20.

130 SARS Home, www.sars.gov.za/Pages/Find-a-Publ.aspx?k=TIEA (accessed 17 February 2019).

131 R. Fisman and E. Werker, ‘Innovations in Governance’ (2011), 84, www.nber.org/chapters/c12045 (accessed 18 February 2019).

132 OECD, ‘Countering Harmful Tax Practices’, 71.

133 Farole, Special Economic Zones in Africa, 199.

134 Ibid.

135 Reuven S. Avi-Yonah and Martin Vallespinos, ‘Special Tax Zones and the WTO’, University of Michigan Public Law Research Paper No. 545 (2017), 3; Pasquale Pistone, Jan de Goede, and Antti Laukkanen (eds.), Special Tax Zones in the Era of International Tax Coordination (2019), 5.

136 Alan O. Sykes, ‘The Economics of WTO Rules on Subsidies and Countervailing Measures’, John M. Olin Law and Economics Working Paper No. 186 (2003), 10.

137 Laukkanen, ‘The Development’, 162.

138 Mary Hallward-Driemeier, Do Bilateral Investment Treaties Attract Foreign Direct Investment? Only a Bit … and They Could Bite (The World Bank, 2003), 4.

139 Also termed ‘taking’, ‘wealth deprivation’, ‘dispossession’, ‘deprivation’ or ‘privation’.

140 When the investment is directly taken through a formal seizure, it can be treated as direct expropriation. Direct expropriation is used to describe ‘the targeting of individual businesses for interference for specific economic or other reasons’ (see M. Sonarajah, The International Law on Foreign Investment (3rd edn, Cambridge University Press, 2010) 365). If the investor cannot utilize the investment successfully, the measure which results in this outcome may still amount to an expropriation. This is what is called indirect expropriation. The meaning of indirect expropriation was defined by the tribunal in the Metalclad v. Mexico case: ‘[E]xpropriation … includes not only open, deliberate and acknowledged takings of property, such as outright seizure or formal or obligatory transfer of title in favour of the host State, but also covert or incidental interference with the use of property which has the effect of depriving the owner, in whole or in significant part, of the use or reasonably-to-be expected economic benefit of property even if not necessarily to the obvious benefit of the host State’. Metalclad Corp v. United Mexican States, ICSID (Additional Facility) Case No. ARB(AF)/97/1, Award, 30 August 2000, para. 103.

141 Ibid., 6.

142 For instance, the government may issue regulatory measures to protect the environment in SEZs, and foreign investors might argue that they have not received FET when the related measures hinder their investment. Valentina Vadi, ‘Balancing Human Rights, Climate Change and Foreign Investment Protection’, in Climate Change and Human Rights: An International and Comparative Law Perspective, eds., Ottavio Quirico and Mouloud Boumghar (2016), 194.

143 The Agreement Between the Government of the Republic of Korea and the Government of the People's Republic of Bangladesh for the Promotion and Protection of Investments, 1986 BITREAT BDKR (6 October, 1988), states: ‘The national or company affected shall have a right, under the law of the Contracting Party making the expropriation, to prompt review, by a judicial or other independent authority of that Contracting Party, of his or its case and of the valuation of his or its investment in accordance with the principles set out in this paragraph.’ Therefore, only expropriation cases can be presented in the domestic courts of the contracting party.

144 See e.g. Metalclad Corp v. United Mexican States, ICSID (Additional Facility) Case No. ARB(AF)/97/1, Award, 30 August 2000.

145 Nowadays, it is essential to draw a clear line between legitimate non-compensable regulations, and legitimate regulatory expropriation, which carries with it an obligation to compensate. George C. Christie, ‘What Constitutes a Taking of Property Under International Law?’, British Year Book of International Law (1962), 38; Rudolf Dolzer, ‘Indirect Expropriation of Alien Property’, ICSID Review-FILJ (1986): 41.

146 Telenor Mobile Communications AS v. Hungary, ICSID Case No ARB/04/15, Award, 13 September 2006, para. 64; Marvin Feldman v. Mexico, ICSID Reports 7 (2002): 318, 103.

147 Restatement (Third) of Foreign Relations Law of the United States, s 712, Comment (g) p. 201.

148 Louis B. Sohn and Richard Baxter, ‘Draft Convention on the International Responsibility of States for Injuries to the Economic Interests of Aliens’, The American Journal of International Law 55 (1961): 545.

149 Ibid. 553.

150 Sonarajah, The International Law, 365.

151 Lee John Beck and Central Asian Development Corporation v. Kyrgyz Republic.

152 Middle East Cement Shipping and Handling Co. S.A. v. Arab Republic of Egypt, ICSID Case No. ARB/99/6.

153 Empresas Lucchetti, S.A. and Lucchetti Peru, S.A. v. The Republic of Peru, ICSID Case No. ARB/03/4 (also known as: Industria Nacional de Alimentos, A.S. and Indalsa Perú S.A. v. The Republic of Peru).

154 In November 2017, the Department of Trade and Industry of the African Union Commission organized the 1st African Union Symposium on Special Economic Zones (SEZs) and Industrial Development from 7 to 10 November 2017, https://au.int/en/pressreleases/20171107/african-union-commission-organized-1st-african-union-symposium-special (accessed 18 February 2019).

155 Yao and Whalley, ‘The China (Shanghai) Pilot Free Trade Zone’, 14.

156 Krishna Chaitanya Vadlamannati and Haider Ali Khan, ‘Race to the Top or Race to the Bottom? Competing for Investment Proposals in Special Economic Zones? Evidence from Indian States, 1998–2009’, in Invisible India: Hidden Risks within an Emerging Superpower, eds., Jason Miklian and Åshild Kolås (Routledge, 2017), 19.

157 Yury Bogdanov v. Republic of Moldova (III) (SCC Case No. 114/2009).

158 Prabhash Ranjan, ‘Free-Zone Company, Investment Standards and the Arab Spring: A Case Study of Ampal-American and Others v. Egypt’, in International Economic Law and the Challenges of the Free Zones – Global Regulatory Issues and Trends, eds., Julien Chaisse and Jiaxiang Hu (The Hague: Kluwer Law International, Global Trade Law Series, 2019), 347.

159 Bawabet Al Kuwait Holding Company v. Arab Republic of Egypt, ICSID Case No. ARB/11/6.

160 Albacora S.A. v. Republic of Ecuador (PCA Case No. 2016-11).

161 Mr Gennady Mykhailenko & United Pipe Export Company Trading Ag v. The Republic of Belarus, www.italaw.com/cases/2307.

162 Southern Pacific Properties (Middle East) Limited v. Arab Republic of Egypt, ICSID Case No. ARB/84/3.

163 See UNCTAD, ASEAN Investment Report 2017: Foreign Direct Investment and Economic Zones in ASEAN (UNCTAD 2017).

164 Ampal-American Israel Corporation and others v. Arab Republic of Egypt, ICSID Case No. ARB/12/11, para. 1, Decision on Jurisdiction.

165 Ibid., para. 40.

166 Ampal-American Israel Corporation and others v. Arab Republic of Egypt, ICSID Case No. ARB/12/11, para. 44, Decision on Jurisdiction.

167 Ibid., paras. 49–52.

168 Ibid., para. 70.

169 Ibid., para. 151.

170 The Tribunal cited Gami Investment Inc. v. The Government of the United Mexican States (UNCITRAL, Final Award, 15 November 2004, paras. 126–127) as an authority to support its position.

171 Ibid.

172 Ampal-American Israel Corporation and others v. Arab Republic of Egypt, ICSID Case No. ARB/12/11, para. 183.

173 Ibid., para. 182.

174 Ibid., para. 184–185.

175 Ibid., para. 186.

176 Vigotop Limited v. Hungary, ICSID Case No. ARB/11/22, Award (1 October 2014) para. 625.

177 Olaoye Kehinde Folake, ‘Goetz v. the Republic of Burundi I & II: How Foreign Investors Challenge “Free-Zone Regimes”’, in International Economic Law and the Challenges of the Free Zones – Global Regulatory Issues and Trends, eds., Julien Chaisse and Jiaxiang Hu (The Hague: Kluwer Law International, Global Trade Law Series, 2019), 317.

178 Antoine Goetz and Others v. The Republic of Burundi (I), ICSID Case No. ARB/95/3, Decision on Liability (2 September 1998), para. 1.

179 The main criteria for eligibility are export of all production; creation of substantial added value; compliance with environmental, health, and safety regulations; and importation or re-export after further processing or packaging of imported products based on a list established by the Minister responsible for the free zones. Advantages of free zone status are: exemption from taxes for 10 years at 15%; minimum tax of 1% for business commercial free; tax reduction of 0.8% for companies that have created more than 30 permanent jobs; dividends are exempt from taxation for an indefinite period; right to repatriate capital and income; permission to have foreign currency bank deposits; flexible labour regulations; and exemptions from import duties and taxes. Businesses are not required to have import licenses.

180 Antoine Goetz and Others v. The Republic of Burundi (I), ICSID Case No. ARB/95/3, Decision on Liability (2 September 1998), para. 5.

181 Ibid., para. 3.

182 Agreement between the Belgo-Luxemburg Economic Union and the Republic of Burundi on the Encouragement and Reciprocal Protection of Investments (signed 13 April 1989, entered into force 12 September 1993) (BLEU (Belgium–Luxembourg Economic Union)-Burundi BIT (1989); ibid., para. 18.

183 Akin to what is described as roller-coaster-effect legislative changes. See PSEG Global Inc. and Konya Ilgin Elektrik Üretim ve Ticaret Limited Sirketi v. Republic of Turkey, ICSID Case No ARB/02/5, Award (19 January 2007), para. 250.

184 Link–Trading Joint Stock Company v. Moldova, Final Award, IIC 154 (2002), 18 April 2002, Ad Hoc Tribunal (UNCITRAL), para. 7.

185 Ibid., para. 63.

186 Ibid.

187 Ibid., para.73.

188 Ibid.

189 Ibid., para. 87.

190 Arpita Mukherjee et al., Special Economic Zones in India: Status, Issues and Potential (Springer 2016), 183.

191 Sherzod Shadikhodjaev, ‘SEZs under the WTO's Scrutiny: Defining the Scope of Trade Issues’, in International Economic Law and the Challenges of the Free Zones – Global Regulatory Issues and Trends, eds., Julien Chaisse and Jiaxiang Hu (The Hague: Kluwer Law International, Global Trade Law Series, 2019), 216.

192 Romo, China's Special Economic Zones, 40.

193 Gulnara Ruchkina and Evgeny Vengerovsky, ‘Investment Activities within the Legal Framework of the World Trade Organization’, Russian Law Journal 3 (2015): 128.

194 World Trade Organization 2001a, ‘WTO Successfully Concludes Negotiations on China's Entry’, WTO News (2008), www.wto.org/english/news_e/pres01_e/pr243_e.htm (accessed 18 February 2019).

195 Romo, China's Special Economic Zones.

196 Ibid.

197 Gerhart, Peter M. and Michael S. Baron, ‘Understanding National Treatment: The Participatory Vision of the WTO’, Indiana International and Comparative Law Review 14 (2003): 505.

198 Susan. L Shirk, ‘Internationalization and China's Economic Reforms’, in Internationalization and Domestic Politics, eds., R. Keohane and H. Milner (3rd edn, Cambridge University Press, Cambridge 1999), 198.

199 Yao and Whalley, ‘The China (Shanghai) Pilot Free Trade Zone’, 14.

200 Ibid., 15.

201 Marrakesh Agreement, Annex 1A, Agreement on Subsidies and Countervailing Measures (SCM Agreement), Article 1.

202 Ibid.

203 Creskoof and Walkenhorst, ‘Implications of WTO Disciplines’, 24.

204 TRIMs, Article 1.

205 Ibid.; For example, China promised to change its long-time ‘technology transfer’ requirement, which is inconsistent with TRIMs commitments.

206 United States Trade Representative, ‘2017 Report to Congress On China's WTO Compliance’ (2018), 137, https://ustr.gov/sites/default/files/files/Press/Reports/China%202017%20WTO%20Report.pdf (accessed 3 November 2018).

207 Creskoof and Walkenhorst, ‘Implications of WTO Disciplines’, 12.

208 Romo, China's Special Economic Zones, 54.

209 Ibid.

210 Julia Ya Qin, ‘WTO Regulation of Subsidies’, 865.

211 Mukherjee et al., Special Economic Zones, 183.

212 World Trade Organization, Agreement on Subsidies and Countervailing Measures (World Trade Organization, Geneva 2009).

213 Ibid.

214 Sykes, ‘The Economics’, 9.

215 Raul Torres, ‘Free Zones and the World Trade Organization Agreement on Subsidies and Countervailing Measures’, Global Trade and Customs Journal 2 (2007): 219.

216 ‘WTO rules against India's export subsidies: All you need to know’, India Today (New Delhi, 1 November 2019), https://www.indiatoday.in/business/story/wto-rules-against-india-s-export-subsidies-all-you-need-to-know-1614635-2019-11-01 (accessed 3 January 2020); Asit Ranjan Mishra, ‘Commerce ministry sets up panel to make SEZ policy compatible with WTO rules’, Live mint (7 June 2018), www.livemint.com/Politics/LWcIXS4l3aQpEhCp8cdahJ/Commerce-ministry-sets-up-panel-to-make-SEZ-policy-compatibl.html (accessed 3 January 2020).

217 Ibid.

218 Diheng Xu, ‘Prospects on the Relationship between Chinese Direct Tax Incentives and Subsidy Rules of the World Trade Organization’, Intertax 44 (2016): 538.

219 World Trade Organization, Trade Policy Review: China, Report by the Secretariat, WTO WT/TPR.S/199 (World Trade Organization, Geneva 2008).

220 Ibid.

221 Ibid.

222 Xu, ‘Prospects on the Relationship’, 538.

223 World Trade Organization, Trade Policy Review.

224 Sherzod Shadikhodjaev, ‘International Regulation of Free Zones: An Analysis of Multilateral Customs and Trade Rules’, World Trade Review 10 (2011): 205.

225 World Trade Organization, Agreement on Subsidies.

226 Ibid.

227 Sykes, ‘The Economics’, 31.

228 Romo, China's Special Economic Zones, 91.

229 Ibid., 65.

230 Ibid., 67.

231 Amit Banerji and Tarum Jain, ‘WTO Rules on Investment: Futility Manifold’, Journal of International Business Research 6 (2007): 1–24.

232 Romo, China's Special Economic Zones, 65.

233 Banerji and Jain, ‘WTO Rules’, 4.

234 Romo, China's Special Economic Zones, 65.

235 Ibid.

236 Kevin C. Kennedy, ‘WTO Agreement on Investment: A Solution in Search of a Problem?’, Journal of International Economic Law 24 (2003): 97.

237 Romo, China's Special Economic Zones, 67.

238 Kennedy, ‘WTO Agreement on Investment’, 97.

239 UNCTAD, World Investment Report 1998: Trends and Determinants (1998), 180.

240 David Collins, Performance Requirements and Investment Incentives under International Economic Law (Edward Elgar Publishing, 2015), 10.

241 WTO Council for Trade in Goods, Joint Study by the WTO and UNCTAD Secretariats, Trade-Related Investment Measures and Other Performance Requirements 21–26, G/C/W/307/Add.1 (8 February 2002).

242 Ibid.

243 Investment, Trade and International Policy Arrangements (1996), 176–79.

244 Fabrice Defever et al., ‘Does the Elimination of Export Requirements in Special Economic Zones Affect Export Performance? Evidence from the Dominican Republic’, World Bank Policy Research Working Paper No. 7874 (2016), 3.

245 Romo, China's Special Economic Zones, 68.

246 See Shadikhodjaev, Industrial Policy, 198–202.

247 Ibid.

248 Carter and Harding, Special Economic Zones.

249 Ibid., 106.

250 Fernando Dias Simoes, ‘When Green Incentives Go Pale: Investment Arbitration and Renewable Energy Policymaking’, Denver Journal of International Law and Policy 45 (2017): 263.

251 Ibid., 264.