Although the key purpose of international investment law is to promote foreign investor protection by offering both substantive and procedural standards, the international investment governance regime needs to strike a balance between foreign investor rights protection and the host state’s right to regulate. The changing balance of this dichotomy shapes a leaving-and-return-of-the-state paradigm which explains and rationalizes an evolutionary development of both substantive and procedural norms and the changing status of sovereignty in international investment law. The “leaving” or “return” of the state paradigm informs us of the role of the state in the context of international investment law. This article makes a normative case for reframing investment and national security within what we call the investment rule of law. Both push for and pull from a liberalization movement are in an attempt to reshape this investment rule of law surrounding the concept of sovereignty, the core of international law.

I. Introduction
II. The State’s “Leaving” and the Construction of theModern International Investment Law Regime
    A. Limitations of Customary International Law and the Coordinationof Interests in International Investment Law
    B. Maximizing the Benefits of Capital Flows and the “Leaving” ofthe State
    C. “Leaving” of the States and the ISDS
III. The “Return” of the States and the Path ofInternational Investment Law
    A. Imbalanced Interests and the Host States’ Dissatisfaction withthe ICSID Arbitration
    B. Anti-liberalization Transformation of Foreign Investment Lawin the Post-Financial Crisis Era
    C. Shifting Focus from Investor Protection to the Right to Regulate
IV. Conclusion

• Shuo Feng(East China University of Political Science and Law. LL.B. & LL.M. (ECUPL))
• Wei Shen(Shanghai Jiao Tong University Law School)