As with all arbitration, consent lies at the root of arbitration of foreign investment disputes.1 It is all the more relevant in such arbitration as a State, a sovereign entity, is involved. Where there is a contract of foreign investment containing an arbitration clause, there can be little doubt that future disputes arising from the contract could be submitted to the tribunal indicated in the arbitration clause as the clause manifests the consent of the parties to such arbitration. The phenomenon that arises in modern foreign investment arbitration which involves a State as one of the parties is the claim that consent to arbitration could be created from a State’s unilateral offer of such arbitration. Such a unilateral offer could be made either through its foreign investment legislation or through the dispute resolution provision in an investment treaty.

The rise of China and India as global economic powers has now become conventional wisdom. A recent Financial Times report, quoting the International Monetary Fund (IMF), observes that “the striking thing about the global economy [in 2007] is how little it relies on the U.S. as the main engine of growth. For the first time in 2007, China's rapidly expanding economy has provided the largest contribution to global growth, while half of the world's expansion over the past year has come from three countries: China, India and Russia.” And the implication is this phenomenon's lasting impact on the evolving international economic order. As Martin Wolf notes, “[t]he economic rise of Asia's giants is … the most important story of our age. It heralds the end, in the not too distant future, of as much as five centuries of domination by the Europeans and their colonial offshoots.”

In June 2006, an international symposium was held at the Faculty of Law, National University of Singapore, to study the resurgence of China and India as world powers from the perspective of international economic law and development.

The announcement of open door policies in Asia have largely applied to foreign investment as they preceded liberalization in the area of trade. China announced its open door policy in 1979 and India set in train less stringent foreign investment controls in 1992. Both events occurred well before the establishment of the World Trade Organization in 1995. To this extent, the developments as to liberalization in the area of foreign investment preceded those in international trade. The move towards free markets showed an ascendancy with the emergence of Thatcherism and Reagonomics and the fall of the Soviet Union, which removed a powerful competing model from the scene. Many factors at the time favoured liberalization of the foreign investment regime. The loans crisis arising from the circulation of petro-dollars had led to the drying up of private funds. Aid had become non existent. The states of Eastern Europe, released from Soviet hold and adopting free market economics, increased competition for the only means of private capital, the investments of multinational corporations. The situation was ripe for liberalization on a global scale. But, though individual countries did show fervour for the adoption of the liberalization model in their foreign investment policies, at the global level, the trend towards globalization has not resulted in global rules on foreign investment. With economic crises in Asia, Russia and Argentina, there has been some rethinking on the value of liberalization of foreign investment regimes.

It has never been so timely to examine the impact of the rise of China and India on the international economic order in the wake of the ongoing global economic crisis. The rapid integration of China and India into the world economy is not only lifting the living standards of over two billion people, but also shifting the global balance of power toward the East. However, the implications of this rise on the international economic and legal system have not been fully explored and many questions remain unanswered. For example, what is China's or India's attitude toward the existing international economic norms including the trading system and its dispute resolution system? What is the role of China and India in regional economic integration which may however be highly politically oriented? Further, although China and India are both on the road to economic globalisation, they seem to have adopted different domestic approaches which might have profound impact on their international behaviors.

This volume, having its origins in a highly successful international symposium of the same title organised by the Faculty of Law of the National University of Singapore in June 2006, is an attempt to address these questions. It brought together a group of distinguished scholars on international law, world trade law and law and development to conduct a unique examination of the roles of China and India in the new world economy from the perspectives of international economic law and comparative law.