Abstract With the increase of global economic uncertainty risks, the contradiction between the “growing but not strong” Chinese outward foreign direct investment and the inefficiency of the existing China’s Bilateral Investment Treaties has become increasingly prominent. Based on the panel data of China and its' 103 host countries from 2003 to 2017, this paper constructs and measures the quality index of Chinese Bilateral Investment Treaties, and testes the influence of Bilateral Investment Treaties quality on China’s outward foreign direct investment by Poisson Pseudo-Maximum-Likelihood estimation. The results show that: high qualified Bilateral Investment Treaties reduce the expropriation risks and other abuses of investment barriers caused by institutional defects in the host countries and promote China’s outward foreign direct investment, but the quality of Bilateral Investment Treaties fails to reduce the risks in host countries with robust institution. Institutional distance inhibits China’s outward foreign direct investment to high-risk host countries with poor institution, while the high qualified Bilateral Investment Treaties promote China’s outward foreign direct investment by defining the protection standards offered by the host country for overseas investment through strict provisions design. Hence, it is necessary to systematically identify the host country heterogeneity of Chinese outward foreign direct investment risks. Bilateral investment Treaties concluded with low-risk host countries should focus on new trends in terms of pre-establishment national treatment and negative list. With high-risk host countries, the details of various expropriations that may cause potential losses and the introduction of separate “umbrella” clauses should be attached great importance to.
2020, Vol. 37 
