Originally from Between East and West: Essays in Honour of Ulf Franke

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China today is an important player in the world of international arbitration. As at the end of 2008, more than 65,000 arbitrations were being conducted in the country involving more than 40 countries and with more than US$16 billion at stake. Outside China, Chinese companies increasingly appear as parties in arbitrations before the major international arbitration institutions. The number of cases involving Chinese parties before the ICC in Paris has increased more than 46 percent over the past 5 years. Similar increases have been seen by other institutions. In addition, the Chinese government has entered into more than 100 bilateral investment treaties providing for international arbitration in investor-state disputes. China has acceded to both the New York Convention and the ICSID Convention and is reportedly drafting a new arbitration law based on the UNCITRAL Model Law.

Thirty years ago, however, the picture was quite different. In the late 1970s China was just emerging from the chaos of the decade-long “Great Proletarian Cultural Revolution.” During that period, law was disdained as a “bourgeois invention;” courts were closed; lawyers were few. Foreign arbitration bodies such as the ICC were rejected as “instruments of imperialism.” Although China’s foreign trade arbitration body, the Foreign Trade Arbitration Commission (FTAC)—the precursor to today’s CIETAC—remained in continuous operation throughout this period, cases were few and far between, mirroring the plunge in the nation’s foreign trade and its fragile economic relations with the outside world.

Of course, the story of China’s transformation from one of virtual isolation from world affairs to full-fledged member of the international arbitration community was driven in large part by economics.