Abstract
Western countries have responded to geopolitical threats associated with China's rise as a world power by restricting the presence of leading Chinese telecommunications companies and equipment in their network infrastructure. The past several years have seen a targeted and expanding effort by countries to remove Huawei, one of the largest actors in the telecommunications sector, from their national markets. Huawei has responded to these regulatory measures by threatening to bring arbitration claims under China's bilateral investment treaties with several European states. Additionally, Huawei has filed a Request for Arbitration against Sweden for its exclusion from the 5G market. This note explores the broader intersection of national security exceptions and investor protections under international investment agreements through Huawei's diminishing access to European markets. It analyzes the Huawei v. Sweden arbitral proceeding and a hypothetical arbitration between Huawei and Germany in response to Germany's phase-out of Huawei equipment, finding that the presence or absence of security exceptions is not outcome-determinative to the success of investor claims. This note concludes that the abruptness of regulatory measures, the commercial viability of diminished investments, and the proportionality and reasonableness of a state's response to the perceived threat of Chinese investments will serve as the focal points of dispute settlement.
Citation
Audrey Faulks,
Security Threats and Diminishing Market Access: Implications for Chinese Investors,
36 Duke Journal of Comparative & International Law
121-154
(2026)
Available at: https://scholarship.law.duke.edu/djcil/vol36/iss1/4