Innovation as a Catalyst in the China-Israel Investment Relationship: The China-Israel BIT (2009) and the Prospective FTA
Forthcoming in Chaisse, Julien (ed.), China's Three-Prong Investment Strategy: Bilateral, Regional, and Global Tracks, Oxford University Press, 2018.
Hebrew University of Jerusalem International Law Forum Working Series 01-18
32 Pages Posted: 6 Feb 2018 Last revised: 27 Mar 2018
Date Written: January 19, 2018
Scientific and technological innovation ("Innovation") has played an instrumental role in shaping contemporary China-Israel relations since the reform era in China. Our essay studies how, and why, Innovation has shaped the relationship, and in particular, it analyzes the implications of an Innovation-based relationship, for China-Israel bilateral investment diplomacy. More broadly, our findings, pointing to Innovation as an important explanatory variable in the China-Israel investment and trade relationship, can contribute to a better understanding of China's changing international investment approach.
We start by considering the importance of Innovation in the individual development strategies of China and Israel, and their respective innovative capacities based on international indicators, noting China's achievements in developing its own innovative capacity. We discuss the central role of Innovation in the history of China-Israeli investment and trade relations. When geopolitical constraints have hindered Innovation transfer, bilateral relations have suffered. The 2008 global financial crisis had surprisingly positive repercussions for Chinese-Israeli economic and political relations since it brought Innovation to the forefront. Finally, we focus on three key aspects of Innovation as a catalyst in the China-Israel investment relationship: the China-Israel Bilateral Investment Treaty, its shortcomings and the implications for the Free Trade Agreement (FTA) negotiations; intellectual property rights in the context of the FTA; and the limitations of Innovation in the greater geopolitical context.
Keywords: China-Israel, Innovation, Investment, BIT, FTA, Economic Diplomacy
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