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Yuanyue Dang

China’s international arbitration efforts have made significant progress, but more work is needed to attract foreign parties to arbitrate in China amid US-China rivalry, according to arbitrators and law scholars.
China’s newly revised Arbitration Law took effect in March, marking the most significant overhaul of the country’s commercial dispute framework since 1994, in a move to promote cities such as Beijing, Shanghai and Shenzhen to develop into international arbitration centres, competing with current global leaders like London and Singapore.
But a harder question for Beijing is not the amount of energy or resources poured in, but whether foreign parties, particularly Western ones, will actually choose mainland China as a seat, according to arbitrators and legal scholars.
The bottleneck is not legal design but trust, they said.
“An international arbitration centre should be a place that everyone chooses as a base for arbitration, even if it has no connection to their country,” said Tao Jingzhou, an independent arbitrator at Arbitration Chambers and one of China’s earliest international arbitrators.


Beijing’s drive to grow its arbitration capacity reflects more than a desire to attract a slice of a high-value professional services market.
It also sits within a broader strategic effort that scholars describe as a deliberate buildout of China’s legal power in foreign affairs.
What exactly does Beijing now hope to achieve?
“Beijing has been investing in upgrading China’s legal power under its foreign-related rule of law initiatives,” said Mark Jia, an associate professor of law at Georgetown University.
“Pushing arbitration is part of an effort to expand the jurisdictional reach of China’s adjudicative institutions.”
With Chinese companies’ overseas investment, infrastructure work and trade footprint having expanded sharply over the past two decades, particularly through the Belt and Road Initiative, a steady flow of cross-border disputes has had to be resolved somewhere, most often in London, Singapore, Paris or Hong Kong.
“Given China’s significant international footprint in the Global South and through the Belt and Road Initiative, there has been and will be a steady stream of legal disputes that have to be resolved somewhere,” Jia said.
“The appeal of attracting more transnational disputes to Chinese forums is ultimately that it may grant Chinese organisations and institutions more control over the outcome of important global disputes.”
China’s long-standing insistence on institutional arbitration had been a notable outlier in the global arbitration community.
In international practice, ad hoc arbitration, where disputing parties appoint arbitrators directly without going through an institution, is a long-established and flexible alternative to institutional arbitration.
The amendments of China’s Arbitration Law that came into effect earlier this year, for the first time, permit ad hoc arbitration in foreign-related maritime disputes and among enterprises registered in free trade zones, and also allow approved foreign arbitration institutions to open offices in those zones to handle international cases.
Matthew Erie, an associate professor at American University Washington College of Law, said that “the amendments are clearly significant and represent a gradual shift to align Chinese commercial arbitration practice with international standards”.
However, the move was never easy, according to Tao.
Tao said that he had urged Chinese legislators multiple times over the years to allow ad hoc arbitration, with little effect until this round of revisions.

Although the change came more than three decades after the original law, he said it represented “significant progress”.
China’s top ruling body, the Supreme People’s Court, “has shown full respect for foreign arbitration outcomes, and this area has seen relatively little judicial intervention”, according to Tao.
According to statistics from the Supreme People’s Court, Chinese courts concluded 42 cases in 2024 involving applications for recognition and enforcement of foreign arbitral awards, with none refused.
Tao, who entered Peking University in 1977 to study law as part of the first class admitted after the Cultural Revolution, a cohort that included the late former premier Li Keqiang, said the figure was an important signal of Beijing’s opening to the international community.
International rankings have also showcased China’s progress in recent years.
According to a report published last year by Queen Mary University of London, Beijing has risen to fourth in the global ranking of the most preferred arbitration seats, behind only London in first place and Singapore and Hong Kong tied for second.
Getting to grips with the challenges that remain
However, experts said that the progress was still not enough.
Chinese local courts still harbour “reservations” about ad hoc arbitration, Tao said.
Erie said that the revised law “still does not conform to” the United Nations Commission on International Trade Law’s model law on international commercial arbitration, the global template most leading jurisdictions follow.
Erie pointed to Chinese authorities’ reluctance to give arbitral tribunals full authority over their own jurisdiction, a principle known in international arbitration as competence-competence.
For China’s arbitration business to go global, it must ensure “the independence of arbitration institutions” and “respect for contractual freedom”, Tao said.
In the commercial sphere, despite Beijing’s repeated emphasis and a new law to firmly protect the rights and interests of private enterprises, some local governments’ profit-driven enforcement practices outside their jurisdictions have cast a shadow in recent years.
In a high-profile case revealed in January last year, some enterprises in China’s eastern province of Zhejiang were targeted by law enforcement officials from outside the province seeking to seize assets. Zhejiang officials had to intercept and recover their frozen bank accounts.
Kun Fan, an associate professor at the University of New South Wales (UNSW) law school, said that for Western parties, confidence depends on “a consistent track record of fair and enforceable outcomes, demonstrable institutional independence in practice, greater international participation in governance and arbitrator pools, and sustained transparency”.
The gap of trust is visible in the caseload data of international cases.
China’s four major arbitration institutions, the China International Economic and Trade Arbitration Commission (CIETAC) in Beijing, the Shanghai International Arbitration Centre, the Beijing Arbitration Commission and the Shenzhen Court of International Arbitration, all reported steady growth in cross-border cases in 2024.

But even at CIETAC, the most internationalised of the four, foreign-related cases accounted for just 13.4 per cent of its total caseload of 6,013.
By comparison, the Singapore International Arbitration Centre handled 625 new cases in 2024, of which 91 per cent were international, with parties drawn from South Korea, mainland China, India, Hong Kong and the United States.
The tensions and full-scale competition between the US and China have added another layer of friction.
Tao said the direct effect of bilateral ups and downs on commercial arbitration has been limited because arbitration addresses contractual disputes rather than policy disputes, such as Section 301 investigations under US trade law.
But foreign companies “may become more inclined to choose a third country for dispute resolution” once geopolitical risk enters the calculation, he said.
Arbitration’s transnational portability cushions some of that risk.
The 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention, has more than 160 member states, meaning awards are generally enforceable worldwide.
How best to proceed down the arbitration road
“Arbitration is an open international market,” Tao said. “If the legislative environment of one country is not good, you can choose another.”
Fan, who is also an international arbitrator, stated that the trust gap was “gradually evolving, but not yet decisively closing.”
“China has made clear progress in institutional design, but arbitration is reputation-driven, and reputation takes time to build,” Fan said.
For Tao, the more important opening in the new law is the provision allowing approved foreign arbitration institutions to set up offices in China’s free trade zones to handle foreign-related cases.
“We cannot let the cake of Chinese arbitration be eaten only by Chinese institutions,” he said.
“The market should be opened to foreign institutions, which would in turn push Chinese institutions to improve the quality of their services.”
But for fully international cases, established seats with longer track records and stronger perceptions of neutrality, such as Hong Kong and Singapore, “are likely to retain their advantage for a while”, UNSW’s Fan said.
For Tao, Beijing’s international arbitration push is not only linked to economic gains, but should also be seen as an opportunity to catalyse progress in its judicial system and “demonstrate to the world its commitment to reform and opening up”.


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China’s newly revised Arbitration Law marks the most significant overhaul of the country’s commercial dispute framework since 1994


China’s newly revised Arbitration Law marks the most significant overhaul of the country’s commercial dispute framework since 1994.


Trust is key if China’s international arbitration goals are to succeed, experts say

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}China’s newly revised Arbitration Law marks the most significant overhaul of the country’s commercial dispute framework since 1994

China’s newly revised Arbitration Law marks the most significant overhaul of the country’s commercial dispute framework since 1994