By Bill H. Zhang

With the rapid development of the China’s economy within the last two decades, China has absorbed and utilized huge amount of foreign capital. Many foreign investors have been doing business with their Chinese partners or making direct investment within China. However, the global economy is currently slowing down, with no exception to the Chinese situation. Along with the China’s former abundant utilization of foreign capital and the current slowing down of the global economy comes a sharp increase of various commercial disputes between foreign investors and their Chinese partners. Three alternative methods are available for foreign investors to resolve their disputes in China: mediation, arbitration and litigation. Mediation is conducted between the concerning parties on a voluntary basis and has no legal binding effect. Compared with arbitration, litigation is much stronger to protect foreign investor’s interests though it is more complex, unpredictable and time-consuming. This article tries to address some important things which foreign investors shall know on litigating or arbitrating in China.

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