That whether state-owned enterprises have the status of private investors is decisive for their availability to international investment arbitration. ICSID adopts a generous position on this issue. While investment protection agreements traditionally decide the availability of arbitration relief through investor-defined terms, the emerging bilateral and regional investment treaties promote the establishment of “private investor status” for state-owned enterprises through the rules of "competitive neutrality". The "commercial transaction test" adopted by ICSID practice is gradually developing from a low standard to a rigid one the judgement of which will comprehensively evaluate all relevant elements including the nature and purpose of activities concerned. The ICSID practice provides significant implications for the China's state-owned enterprises as to their participation of international investments and self-reform.