Arbitration of commercial disputes in China

In the late 1970s, china decided to modernize its industry, agriculture, national defense, and science and technology. To achieve this goal, china commenced economic reforms and opened its door to the outside world. Among various reform measures, the decollectivixatoin of agricultural production, the decentralization of economic decision - making, and the absorption of foreign investment have been attributed to the county's rapid economic growth. At the same time, the increased quantity and complexity of economic transactions have engendered an upward trend in economic disputes.

Prior to the implementation of economic reforms, disputes between domestic enterprises in China were principally resolved by administrative orders, whereas disputes involving foreign trade contracts were referred to the Foreign Trade Arbitration Commission. Starting form the early 1980s, commercial disputes in China have been resolved primarily through arbitration, mediation , and litigation. among these three modes of dispute resolution, arbitration has been the most important one. This article, therefore, aims at providing an overview of arbitration of commercial disputes in China.

Toward this aim, the core of this article is divided into six sections. Section I introduces resolution of economic disputes in China before the implementation of reforms. Section II examines arbitration of commercial disputes in China during the 1980s and the early 1990s. Section III outlines the basic framework for arbitration rules after 1994. Section IV discusses arbitration commissions and arbitration rules after 1994. Section VI explains why arbitration is chosen over litigtion is resolving commercial disputes in China and what limitations still remain. It is hoped that this article will generate useful insights about resolution of commercial disputes in China.