By: Michelle Ratton Sanchez-Badin & Fabio Morosini



This paper aims to fill a vacuum in the international economic law literature about the legal tools mobilized by Chinese state-investments in middle-income economies. In order to develop this analysis, we scrutinize the largest operation of Chinese investments in Brazil: the acquisition of Companhia Paulista de Força e Luz (“CPFL”) by State Grid in the electric energy sector. This analysis assesses the impact of such investments on three levels: the bilateral coordination macrolevel, the national regulatory framework mesolevel, and the corporate governance microlevel. The two main questions driving this exercise are: Which legal instruments support these economic interactions, and can they be qualified as disruptive of the international economic law order? We conclude that, in comparison to large and small economies, Chinese investments have been much less disruptive to middle-income economies such as Brazil, due to (i) the similar legal tools employed to manage the international economic legal order, (ii) an economic and legal environment previously exposed to foreign direct investments in strategic sectors; and (iii) the inexistence of reported direct interference, also known as “shadow administration,” of the Chinese Communist Party in the daily operations of the corporation.