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One significant concern in the current international investment is the imbalance between foreign investors' interests and the host state's right to regulate in the public interest. Broad investment protections are enjoyed by foreign investors, such as the protection of legitimate expectations included in fair and equitable treatment, whereas the host state's regulatory power for the public interest is somewhat restricted. How to strike a balance in such an imbalanced investor-state relationship is being considered by states, including China, to deliver their sustainable foreign investment. Proportionality, which first originated in Germany, has been noted by scholars as an appropriate tool to strike a balance between private rights and the state's regulatory power by three consecutive assessments of suitability, necessity, and proportionality stricto sensu, respectively. However, how to bring this method into the settlement of investor-state disputes and how to apply it to balance conflicting values between foreign investors and the host state raise debates. Due to its failure to fulfil the requirements of Article 38 (1) of the Statute of the International Court of Justice, the application of proportionality depends on the interpretation of each case. Proportionality can be applied if it is expressed in the case-related treaty or included in the host state's domestic law, which is the applicable legal instrument of the case. A systemic interpretative method is then needed to apply proportionality in investor-state arbitration. This research tests the possibility and practicability of applying proportionality in striking a balance between the investor-state relationship from the international and Chinese perspectives to ascertain an appropriate method to balance the investor-state relationship in international investment, particularly in Chinese international investment. Due to its dual role in international investment, a balanced investor-state relationship is in China's interest. The approach it adopts may also benefit the capital importer and exporter.

The stability concept has been considered a shelter by international energy investors against unilateral host state actions. Investors constantly look for ways to ensure a stable legal environment in host states in order to be able to secure profit from their investments. Stability provisions, as found under investment contracts or domestic laws, are the main tools that international energy investors employ in this regard. Even though stabilisation clauses have been around for decades, the dispute regarding their efficiency is still ongoing. This thesis adds another perspective to the utilisation of the stability concept in investment treaty protection by assessing it through the prism of the legitimate expectations principle. The legitimate expectations principle, as the most important component of the Fair and Equitable Treatment Standard, plays a significant role in providing protection to the investments. Despite this, the contours of the principle have not been defined well under investment treaty jurisprudence. This thesis explores the relationship between the stability and legitimate expectations concepts in the field of international investment law. First, it analyses these concepts separately to identify their contours and then brings them together to illustrate the interplay between these two concepts. This thesis finds that there is a close link between these concepts, upon which investors might rely while arguing their cases before arbitral tribunals. The analysis in this thesis identifies three main sources of legitimate expectations: contractual commitments, administrative representations of host states, and the general legal framework prevailing in host states. It has been argued in this work that each of these sources, when analysed in conjunction with stability commitments, provide a stronger and more efficient protection framework to investors under investment treaties. The thesis shows that while stabilisation provisions create legitimate expectations to be protected, there is also a requirement arising from investment treaty law for host states to provide a stable investment environment, even in the absence of an explicit stability assurance.