{"id":38833,"date":"2025-10-30T13:22:20","date_gmt":"2025-10-30T13:22:20","guid":{"rendered":"https:\/\/www.cdr-news.com\/?post_type=product&p=38833"},"modified":"2025-10-30T15:21:01","modified_gmt":"2025-10-30T15:21:01","slug":"how-chinese-law-is-being-written-into-global-contracts","status":"publish","type":"product","link":"https:\/\/www.cdr-news.com\/cdr-essential-intelligence\/belt-and-road-initiative\/how-chinese-law-is-being-written-into-global-contracts\/","title":{"rendered":"The \u2018Legal Belt and Road\u2019: how Chinese law is being written into global contracts"},"content":{"rendered":"

As China starts to flex its legal as well as economic muscles, businesses, governments and legal practitioners are adapting to a new order in the world of international disputes.<\/p>\n

The Belt and Road Initiative (BRI) has long been associated with ports, railways and power stations.\u00a0 But increasingly, it comes with a legal dimension too.\u00a0 Alongside contractual terms governing financing and construction, contracts are more often than ever before stipulating that disputes must be governed by Chinese law and handled by Chinese courts or arbitral institutions.\u00a0 Lawyers and policymakers now refer to this trend as the \u2018Legal Belt and Road\u2019.<\/p>\n

A growing contractual pattern<\/strong><\/h1>\n

When Chinese state-owned banks and contractors are involved, governing contracts increasingly point disputes back to China.\u00a0 Data from the Virginia-headquartered research lab AidData suggests this is especially common in sovereign and quasi-sovereign lending.\u00a0 Governing law is frequently Chinese, and fora including the China International Economic and Trade Arbitration Commission (CIETAC) are often named in contracts.\u00a0 Sometimes there are hybrids \u2013 Chinese law paired with arbitration in Singapore \u2013 but the starting point tends to be PRC law and PRC fora.<\/p>\n

The key issue is not just which forum is chosen, but how neutral and arbitration-savvy it is.\u00a0 Lawyers want to know how familiar judges are with arbitration and arbitration-related issues.\u00a0 <\/em>The jurisdiction selected has full control over the arbitral process if either party elects to seek judicial intervention, from constitution of the tribunal all the way to potential set-aside of the award.\u00a0 While an award can be enforced elsewhere, its legal existence is within the jurisdiction, which makes neutrality and \u2018arbitration comfort\u2019 critical for protecting the integrity and the ultimate results of the arbitral process.<\/p>\n

Which body and which governing law the parties agree on is always a matter for negotiation, wherever the dispute is.\u00a0 Some lawyers report working on contracts where Chinese businesses insist on Chinese law and seats of dispute resolution, making the most of their leverage.<\/p>\n

A policy push from the top<\/strong><\/h1>\n

This contractual pattern aligns with Beijing\u2019s efforts to promote its own dispute-resolution institutions.\u00a0 Since 2018, the Supreme People\u2019s Court (SPC) has been building mechanisms to anchor BRI disputes in China, with the flagship forum, the China International Commercial Court (CICC), promoted as a one-stop shop that blends litigation, arbitration and mediation.\u00a0 The SPC has also issued a series of opinions since 2015 promising stronger judicial services for BRI commerce, with its 2021 update stressing \u201chigh-quality\u201d adjudication.<\/p>\n

For some, this is less a deliberate export strategy than the natural consequence of China\u2019s financial dominance in BRI projects, but the end result is the export of Chinese law.<\/p>\n

Arbitration in the spotlight<\/strong><\/h1>\n

Arbitration remains the preferred tool in many deals and CIETAC is staying ahead of the game, updating its rules to include early dismissal and third-party funding, while also reporting rising numbers of cross-border disputes and more multilingual cases.<\/p>\n

Global surveys confirm that China\u2019s arbitral centres are moving up the rankings.\u00a0 The 2025 Queen Mary University of London\/White & Case survey placed Beijing among the top five most preferred global seats, with Shenzhen and Shanghai also in the top 10.\u00a0 London, Singapore and Hong Kong still lead, but Mainland China\u2019s seats are making steady gains \u2013 and taken together, would already place China firmly in the number one spot.<\/p>\n

Chinese institutions are also promoting hybrid resolution models.\u00a0 These combine mediation with arbitration in the hope of producing swifter, more conciliatory outcomes.\u00a0 Their general utility in international projects is untested, but they may have value in disputes involving a government entity or a dispute between business partners or shareholders who need to continue working together long-term once the dispute is resolved.\u00a0 In such cases, a combined mediation and arbitration process geared towards conciliation could make sense.\u00a0 But such models also risk procedural complexity, resulting in delays and caution from foreign counsel.<\/p>\n

Compared to more established international institutions such as the ICC International Court of Arbitration, with a long-established track record of quality decision-making, it can be hard to persuade foreign parties of the merits of Chinese courts and arbitral institutions.\u00a0 And while Western reservations about China can, in some cases, be attributed to a combination of unfamiliarity and even a degree of suspicion and Sinophobia, the inability to get disclosure is also a real factor.<\/p>\n

Where does Hong Kong come in?<\/strong><\/h1>\n

Hong Kong continues to serve as a bridge between systems.\u00a0 A new reciprocal regime, effective January 2024, allows civil and commercial judgments to be recognised and enforced between Mainland China and Hong Kong with relative ease.<\/p>\n

For arbitration, Hong Kong\u2019s big advantage is the 2019 interim measures arrangement, which allows parties in Hong Kong-seated arbitrations to apply directly to Mainland courts for asset freezes and evidence preservation \u2013 something no other offshore seat offers.\u00a0 The Hong Kong International Arbitration Centre (HKIAC) reports dozens of such applications each year, making Hong Kong a genuine middle ground between Chinese and foreign systems.<\/p>\n

Legal risks<\/strong><\/h1>\n

While Chinese institutions are seeking to attract foreign parties, Chinese contractors themselves face difficulties when operating abroad due to incompatibility and unfamiliarity between Chinese law and foreign institutions or courts.\u00a0 These risks can be reduced by selecting another governing law and arbitration seat, but procedural risks remain, especially where local courts attempt to interfere with an arbitration by ordering one or more of the parties not to file, or to suspend.<\/p>\n

Reform and outlook<\/strong><\/h1>\n

China\u2019s domestic legal framework is becoming far more outward looking, with amendments to the Civil Procedure Law in 2023 harmonising much of the Chinese approach to foreign awards with international practice.\u00a0 China has also signed up to create the new International Organization for Mediation, headquartered in Hong Kong.\u00a0 Officials present it as a contribution to global dispute resolution, though international trust in its independence remains to be tested.<\/p>\n

Looking further ahead, some observers expect the system to evolve through a combination of Chinese influence and international harmonisation and, as Chinese norms expand, they will naturally meld with existing international practices.<\/p>\n

The bottom line<\/strong><\/h1>\n

The Legal Belt and Road is far more than a snappy catchphrase: it is a growing body of contracts, institutions and reforms that tie dispute resolution closer to China.\u00a0 For counterparties, this means thinking hard about forum, law and enforcement at the negotiation stage.\u00a0 The neutrality and competence of the chosen jurisdiction remain critical for protecting the arbitral process.\u00a0 And as China\u2019s legal footprint expands alongside its commercial reach, businesses may find themselves navigating an increasingly Sinocentric dispute-resolution landscape \u2013 one that promises eventual convergence with international norms, but only after a period of adjustment in which Beijing\u2019s preferences carry considerable weight.<\/p>\n","protected":false},"excerpt":{"rendered":"

As China starts to flex its legal as well as economic muscles, businesses, governments and legal practitioners are adapting to a new order in the world of international disputes. The Belt and Road Initiative (BRI) has long been associated with ports, railways and power stations.\u00a0 But increasingly, it comes with a legal dimension too.\u00a0 Alongside […]<\/p>\n","protected":false},"featured_media":0,"parent":38827,"template":"","meta":{"inline_featured_image":false},"product_brand":[],"product_cat":[3224],"product_tag":[],"class_list":{"0":"post-38833","1":"product","2":"type-product","3":"status-publish","5":"product_cat-belt-and-road-initiative","7":"first","8":"instock","9":"downloadable","10":"virtual","11":"taxable","12":"purchasable","13":"product-type-simple"},"yoast_head":"\nHow Chinese law is being written into global contracts<\/title>\n<meta name=\"description\" content=\"This article looks at the 'legal belt and road trend', discussing a growing contractual pattern, a policy push from the top, arbitration, legal risks and more.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" 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