Here is the next installment in our China and ADR Design Series:
China’s Arbitration Institutions
Liu Zihe and Ren Zhong
In much of the world, arbitration is concentrated in a relatively small number of major institutions. China has 285 local arbitration centers. That difference is not simply a matter of scale. It reflects a distinctive approach to dispute-system design: government-supported institutional creation followed by increasing competition, differentiation, and movement toward organizational independence.
The growth has been extraordinary. In 1995, 11 Chinese arbitration centers handled 107 cases involving roughly RMB 300 million (approximately US$44.7 million). By 2025, the Ministry of Justice reported 285 centers, which collectively had handled more than five million cases involving more than RMB 9 trillion (approximately US$1.34 trillion) and parties from over 100 countries and regions. The result is an arbitration market unlike anywhere else in the world.
Why So Many Institutions?
The answer begins with the 1994 Arbitration Law. Rather than organizing arbitration through a single national system, the law permitted arbitration centers to be established in municipalities directly under the central government, provincial capitals, and, where necessary, other qualifying cities. The centers were independent of one another and were not arranged in an administrative hierarchy. Because many local governments were eligible to establish a center, many did.
The number therefore reflects legal and administrative structure as much as market demand. China today has close to 300 municipalities and other cities that fit the relevant statutory categories, which roughly corresponds to the number of arbitration centers now operating.
Government involvement also helps explain why China can identify the number so precisely. In addition to obtaining ordinary legal-person status, arbitration centers must be registered with provincial judicial-administration authorities. Their development historically has involved government support and supervision, even as reforms increasingly have emphasized institutional independence and financial self-sufficiency.
For ADR scholars, this history illustrates an important design choice. China did not begin by allowing a small number of institutions to emerge solely through market competition. It first created a broad institutional infrastructure and then gradually exposed those institutions to stronger competitive pressures.
Different Institutions, Different Roles
The resulting centers have not developed in identical ways. Some of the leading institutions, including CIETAC, the Beijing Arbitration Commission, and the Shenzhen Court of International Arbitration, have invested heavily in foreign-related and international arbitration. Several have opened offices or other presences outside mainland China and increasingly compete for cross-border disputes.
Domestic commercial arbitration, however, remains the foundation of the system. Even at major institutions with substantial international caseloads, most cases remain domestic. Economic growth, crowded courts, and government support for non-litigation dispute resolution have all contributed to that expansion.
Other centers have developed more locally focused roles. Government policy has encouraged arbitration institutions to participate in community-level dispute resolution, sometimes through publicly funded programs coordinated with courts, mediation organizations, and grassroots bodies. Local initiatives have included mediation-arbitration programs for road-traffic disputes and specialized complaint platforms for tourism disputes. These examples blur the line between a conventional commercial arbitration provider and a broader local dispute-resolution institution.
That diversity is significant. The existence of many centers has created space for different institutions to specialize by geography, industry, technology, or user population rather than forcing every provider into the same model.
Competition, Differentiation, and Exit
A system with 285 institutions also creates competitive pressures. The centers differ substantially in caseload, expertise, reputation, technology, and access to international work. Some have become nationally or internationally prominent; others remain primarily local. As institutions have moved away from government staffing and toward financial self-sufficiency, those differences increasingly matter.
Chinese policymakers have tried to encourage competition while also regulating its excesses. Government guidance has addressed practices such as improper solicitation of cases, low-price competition, and misuse of funds. The 2025 Arbitration Law also clarified the legal-person status of arbitration centers and added provisions addressing termination and deregistration. As the number of institutions approaches the practical ceiling created by the statutory framework, institutional exit may become as important as institutional creation.
This evolution is unusual in comparative perspective. China effectively incubated a large network of arbitration institutions, encouraged their professionalization and independence, and is now allowing market forces to play a greater role in determining how they develop. The long-term result may be consolidation, specialization, or both.
For the broader ADR community, the Chinese experience raises a useful institutional-design question: when building a dispute-resolution system, is it better to begin with a small number of strong providers and allow expansion through market demand, or to build broad institutional capacity first and let competition sort out the differences later? China has largely followed the second path.
That competition also helps explain the technological experimentation discussed in the next post. When institutions compete for users, investments in case administration, online platforms, and artificial intelligence can become part of the institution’s identity and competitive strategy.
About the authors
Liu Zihe is an assistant professor at the School of Civil, Commercial and Economic Law, China University of Political Science and Law, where his research focuses on civil procedure. Ren Zhong is a professor and doctoral supervisor at Tsinghua University School of Law.
This post draws on Liu Zihe and Ren Zhong, “The Emergence of Local Arbitration Centers,” in Richard Bales & Dan Xie, eds., The Cambridge Handbook of Arbitration in China (Cambridge University Press, forthcoming spring 2027). The submitted chapter is available on SSRN.
