China has long lacked a uniform national framework for commercial mediation. That position changes on 1 May 2026, when <span class="news-text_italic-underline">The Regulations on Commercial Mediation</span> (the “<span class="news-text_medium">Regulations</span>”), published by the State Council on 31 December 2025, comes into force. The Regulations represent the first China-wide legal framework dedicated exclusively to commercial mediation and places the Ministry of Justice of the People’s Republic of China into the role of a regulatory authority. For enterprises, including foreign-invested and foreign enterprises, the Regulations introduce mediation as a legally recognised and properly regulated dispute resolution option, sitting alongside arbitration and litigation.
From a business perspective, the Regulations are expected to reduce dispute resolution friction, align China's domestic framework more closely with international standards, promote cross-border enforceability and strengthen institutional credibility. These developments are of direct relevance to enterprises engaged in complex, high-value, or cross-border transactions.
Prior to the Regulations, there was no uniform national framework governing commercial mediation in China, only localised rules in pilot zones or industry-specific provisions. The Regulations change this by formally recognising mediation as a legal dispute resolution mechanism and regulating non-profit commercial mediation organisations as legal entities subject to licensing, supervision and accountability.
Mediation bodies have existed in China for some time. Indeed, the China Council for the Promotion of International Trade established one as early as 1987 and the Shanghai Commercial Mediation Centre was set up in 2011. However, the introduction of judicial administrative authorities as regulators marks a significant development. As a precursor to the national framework, Shanghai established the country's first Ministry of Justice-supervised mediation organisation, the Shanghai Eastern International Commercial Mediation Centre (“<span class="news-text_medium">SICMC</span>”), in early 2025. In September 2025, the German Chamber of Commerce in China and SICMC jointly established a “Sino-German International Mediation Centre” as a virtual platform within the SICMC.
The Regulations, together with institutions such as the SICMC, will reduce uncertainty for enterprises, who can now rely on government-registered mediation bodies operating under uniform national standards and subject to regulatory oversight.
The Regulations cover a broad range of commercial disputes, including those relating to trade, investment, finance, transportation and logistics, real estate, construction and infrastructure and intellectual property including technology transactions. This scope closely reflects the typical activities of enterprises operating in China. As a practical consequence, businesses may now include commercial mediation clauses in their contracts with confidence that such clauses are legally supported and enforceable.
The Regulations place considerable emphasis on party autonomy. Mediation is expressly voluntary and either party retains the right to decline. The parties may jointly select their mediators, including foreign mediators and agree on procedural rules, language and format, including online mediation. Mediators are subject to strict requirements regarding conflicts of interest. They must disclose any such conflicts, withdraw where impartiality is reasonably in question and recuse themselves from any related litigation or arbitration proceedings.
These provisions address longstanding foreign concerns about neutrality and local protectionism by setting clear independence and ethical standards. They also ensure that parties retain meaningful procedural control, a factor which is frequently decisive in cross-border contracting.
The Regulations expressly permit commercial mediation organisations to engage foreign mediators with relevant professional standing and credibility. This brings the Chinese mediation framework closer to the models employed by leading international institutions. The ability to appoint mediators familiar with international business practice, common law concepts, or industry-specific standards is of considerable practical value to foreign management and legal teams, enhancing the perceived fairness and professionalism of proceedings.
The Regulations provide robust confidentiality protections. Mediation proceedings are non-public by default and information disclosed during the process must be kept confidential. Disclosure is permitted only with the written consent of all parties or where required by law. This offers a materially safer environment for sensitive commercial information than litigation in Chinese courts, where judgments and filings may be publicly accessible. This protection is of particular value in disputes concerning technology transfer, intellectual property licensing, pricing arrangements, supply chains, or joint ventures.
Mediation agreements concluded under the Regulations are legally binding and where a party fails to comply, the other may apply for judicial confirmation pursuant to the relevant provisions of China's <span class="news-text_italic-underline">Civil Procedure Law</span>. Once judicially confirmed, a mediation agreement may be enforced in the same manner as a court judgment, substantially reducing enforcement risk and strengthening confidence in mediation as a vehicle for resolving higher-value disputes.
On the question of cross-border enforcement, the Regulations provide that parties may apply for enforcement by competent foreign authorities in accordance with applicable international treaties. This is particularly relevant in the context of the United Nations Convention on International Settlement Agreements Resulting from Mediation, to which China is a signatory, as well as Belt and Road transactions and multi-jurisdictional supply chains.
Where mediators and parties agree, online mediation carries the same legal effect as in-person proceedings. This enables parties to reduce travel and logistical costs, facilitates faster resolution of disputes involving overseas headquarters and supports coordination amongst multinational stakeholders. It is of particular benefit to regional headquarters, shared service centres and companies managing disputes across multiple Chinese subsidiaries.
The Regulations are designed to improve the interaction between commercial mediation and other dispute resolution processes, including litigation, arbitration and notarisation. Mediation does not preclude recourse to other methods and a failed mediation does not prejudice subsequent formal proceedings. Equally, successful mediation may shorten or entirely eliminate the need for litigation or arbitration. This flexibility allows enterprises to optimise their dispute resolution strategy rather than committing to a single approach at the outset.
Whilst arbitration and litigation will remain essential tools, the new Regulations establish commercial mediation as a strategically viable, legally robust and internationally compatible option for enterprises operating in or with China. The framework offers a government-endorsed mediation mechanism aligned with international norms, with the potential to deliver lower costs and shorter timelines, particularly for mid-value disputes, alongside enhanced enforceability, greater procedural comfort, neutrality, confidentiality and contractual flexibility.
