Why China Should Regulate Its Overseas Investors’ Environmental Behavior

Abstract

In the half-century-old debate on disciplining the overseas behavior of transnational companies in fields like human rights and the environment, emerging economies’ potential as capital exporter states is largely ignored: they are usually perceived as the problem, rather than a solution provider. When they take action, usually with the aim of enhancing their reputation globally, they limit it to voluntary codes and recommendations to their overseas investors, like China did during the recent years. This article explores, through an interdisciplinary approach blending public relations, international relations and socio-doctrinal legal analysis, China’s negative and affirmative motivations for moving ahead and taking regulatory steps in disciplining its investors’ behavior. Practical (reputational) and ethical factors are analyzed, leading to the conclusion that China has strong motivators for taking action in the actual international context. The country’s policy makers can put them in balance with the status-quo motivators (mainly, related to economic comparative advantage) and decide accordingly.