Abstract: The Bilateral Investment Treaties, through the way of policy arrangement between two countries, reduce the investment threshold and risks of investors, and promotes the development of Chinas Outward Foreign Direct Investment. But because the gap of development level and institutional environment really exists among the signatories of bilateral investment treaty (BIT), the national differences may obviously exist in the way and degree of its influence on Chinas OFD. This paper, using the panel data covering 57 developing countries during 2005-2012 by PCSE model method, explores the relationship between the bilateral investment treaties and Chinas OFDI location choice. The results indicate that: the BITs promote Chinas OFDI, and this influence is more significant in low institutional countries.

Key words: bilateral investment treaties, institutional environment, political risk, outward foreign direct investment