ZHANG CHENGLIANG/CHINA DAILY

A new generation of global investment rules has been taking shape since the end of the 2008-09 financial crisis, and China should take a more proactive approach in joining the ongoing negotiations, reform its domestic regulations and better use the rules to protect its interests.

The world has experienced two generations of global investment system. The first appeared after the end of the World War II, with European-style bilateral investment treaties dominating the system, in which developed countries wanted to protect their overseas investments while developing countries emphasized their authority to regulate inbound foreign investments.

The second generation of global systems emerged in the 1980s, with US-style bilateral treaties playing a major role.

In this system, investment freedom was key, featuring pre-entry national treatment for foreign investors, higher standards in protecting those investors and the practice of allowing individual investors to resort to international arbitration systems in settling disputes with the investment destination country.

Another notable development during this time was that the first major attempt to have a comprehensive global investment agreement failed. In the 1990s, the Multilateral Agreement on Investment, initiated by the Organization for Economic Cooperation and Development did not materialize because of the great divide between developed and developing economies.

In the past, China missed opportunities to become part of the global investment system. The existing bilateral treaties it signed with other economies are basically its first-generation of treaties, a fact that shows how slow the country is in catching up with global evolution.

Now the world is in the process of shaping the third generation of investment systems, and it is important for China to analyze the new trends and map out its strategy to keep abreast with the times.

In this new round of rule making, emerging economies will surely play a much bigger role.

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