China’s commercial mediation regime has reached a milestone. On 31 December 2025, the State Council issued the Regulation on Commercial Mediation (Order No. 827), the first administrative regulation devoted specifically to commercial mediation. The Regulation, consisting of 33 articles, takes effect on 1 May 2026, filling a long-standing legislative gap and laying the domestic-law groundwork for China’s eventual ratification of the Singapore Convention on Mediation.
Why Now: Legislative Background and Policy Logic
For years, Chinese commercial mediation has operated under the dual handicap of “active practice, missing legislation”. As of end-2023, around 223 independent third-party commercial-mediation organisations had been registered nationally, but no unified superior-level rules existed.
The Third Plenum of the 20th CPC Central Committee called for the improvement of international commercial arbitration and mediation systems; the Fourth Plenum further called for accelerated development of the foreign-related rule-of-law system and a robust suite of foreign-related commercial mediation, arbitration and litigation mechanisms. The Regulation operationalises that mandate.
The legislation pursues three “supports”: healthy industry development; a world-class, market-based and law-based international business environment; and high-quality development with high-level opening-up. The Ministry of Justice has noted that the Regulation is “grounded in China’s national conditions and the realities of the industry while benchmarking high-standard international trade and commercial mediation rules” — building a framework with Chinese characteristics that meets international standards.
China was among the first signatories of the Singapore Convention on Mediation on 7 August 2019, but has not yet ratified. The principal obstacles have been an underdeveloped domestic mediation framework and the absence of cross-border enforcement mechanisms for settlement agreements. The Regulation moves the ratification process forward materially. Article 23 expressly contemplates that, “where enforcement is to occur outside the PRC, the parties may apply to the foreign competent authorities pursuant to the applicable international treaty”.
Scope and Core Institutional Design
Independent Status of Commercial Mediation
The Regulation, for the first time at the administrative-regulation level, defines the concept and scope of commercial mediation. It covers trade, investment, finance, transport, real estate, construction and IP disputes, and expressly excludes marriage, succession, guardianship, labour/personnel, and consumer-rights matters. Distinguishing features versus people’s mediation include: commercial mediation may charge for services (market-driven); mediators must meet high professional standards; and confidentiality and international features are emphasised. Pro-bono mediation by trade associations is not within scope.
Gate-Keeping for Mediation Organisations
A strict licensing regime applies. To establish a commercial mediation organisation, the founders must be non-profit legal persons; the name must include “commercial mediation”; the body must have its own premises and articles, assets of at least RMB 300,000, no fewer than five qualified mediators, and adequate full-time staff. Registration follows a “municipal preliminary review + provincial approval” model, with an executive certificate issued upon approval. Existing bodies established before the Regulation must complete formalities by 1 May 2027.
Mediator Qualifications
Four eligibility tracks: (i) holders of the National Unified Legal Profession Qualification with at least three years of mediation work; (ii) lawyers, arbitrators, or notaries with at least three years’ practice, or former judges or procurators with at least three years’ service; (iii) holders of mid-level or higher professional titles in law, economics, science and technology and the like; (iv) those with at least three years’ commercial-mediation experience and a bachelor’s degree or higher prior to the Regulation’s effective date.
Notably, the Regulation permits commercial mediation organisations to appoint mediators from overseas professionals of recognised influence and credibility, subject to filing with the provincial judicial administrative authority. The CCPIT Mediation Centre alone has appointed more than 900 Chinese and international mediators — institutional support that benefits foreign-related practice.
Enforceability of Settlement Agreements
The enforceability of settlement agreements is the regime’s central concern. Article 22 confirms legal effect. Multiple enforcement avenues are provided:
- Judicial confirmation — the core path. Upon confirmation, the agreement carries the same enforceability as a final judgment. Under the Civil Procedure Law, the parties must jointly apply within 30 days to the competent grassroots court. The Shenzhen Qianhai Court has, in practice, completed judicial confirmation within two days.
- The agreement may also be converted into an arbitral mediation document or arbitral award, or notarised as an enforceable creditor’s instrument.
- For cross-border enforcement, the Regulation leaves room for engagement with the Singapore Convention.
Linkage with Litigation and Arbitration
Article 7 mandates the perfection of linkage mechanisms with litigation, arbitration and notarisation, building a tri-pillar dispute-resolution architecture.
Court-mediation linkage. In practice, two models operate — court-referred mediation pre-filing, and court-entrusted mediation post-filing. Successful mediation may proceed to judicial confirmation. The Supreme People’s Court Mediation Platform already connects with chamber-of-commerce platforms and non-litigation dispute centres for full-process online handling.
Arbitration-mediation linkage. The internationally familiar Arb-Med-Arb model is increasingly used: arbitration is commenced, mediation is conducted, and any settlement is recorded as a consent award, which enjoys the cross-border enforceability of the New York Convention.
International Picture
The Singapore Convention on Mediation (adopted December 2018; in force September 2020) addresses the gap left by the New York Convention (arbitral awards) and the Hague Convention (court judgments). Together they constitute the three pillars of international enforcement.
To date, 57–58 states have signed; around 14 (Singapore, Japan, Türkiye and others) have ratified. China signed in August 2019 but has not yet ratified. The main hurdles include an underdeveloped domestic regime, the absence of a direct enforcement mechanism for international settlement agreements, and gaps in mediator-qualification certification. The Regulation moves each forward.
The mainstream international model is facilitative mediation — the mediator remains neutral and does not opine on the merits, leaving outcomes to the parties. This differs from China’s traditional “persuasive” mediation and aligns better with sophisticated commercial dispute resolution.
The Singapore International Mediation Centre (SIMC) and the Hong Kong International Arbitration Centre (HKIAC) lead Asia-Pacific practice. In May 2025 the Convention on the Establishment of the International Organization for Mediation was signed in Hong Kong, with the organisation’s headquarters in Hong Kong — the first intergovernmental organisation devoted to mediation, signalling the region’s growing weight.
Five Reasons Enterprises Choose Commercial Mediation
Cost and time savings. UK CEDR data shows 82% of users report mediation is more cost-effective than litigation, saving roughly £5.9 billion annually in management time and legal fees. Mediation can cut dispute-resolution cost by 60–70% and shorten timelines by 12–24 months. The CCPIT Mediation Centre handled 6,366 cases worth RMB 39.78 billion in H1 2024, with case volume rising about 48% year-on-year.
Settlement rates of 70–92%. CEDR reports an overall settlement rate of 92% (72% on the day, 20% shortly after). Construction-dispute mediation reaches 85% success; IP disputes resolve 68% via mediation. Compliance rates with mediation agreements (85–90%) materially exceed enforcement rates of contested judgments.
Confidentiality. Mediation is non-public and not transcribed; participants owe confidentiality duties. This protects market capitalisation, trade secrets and reputation — particularly important for listed companies.
Preservation of long-term relationships. The non-adversarial nature of mediation supports continued cooperation; about 60% of mediators report improved post-resolution relationships.
Flexibility and creative solutions. Mediation is not constrained by strict legal rights and obligations. Courts as escrow agents, instalment plans, discounted goods deals, and other creative outcomes are common. Parties choose the mediator, schedule and method.
Suitable Disputes and a Decision Checklist
Commercial mediation suits trade, investment, finance, transport, real estate, construction and IP disputes. In practice, mediation enjoys high success in sales-of-goods disputes, international trade disputes, equity-investment disputes, patent and trademark disputes, consumer-banking disputes, construction-payment disputes and commercial-lease disputes.
Decision factors favouring mediation: continued willingness to cooperate; reasonably clear facts; room for commercial solutions; counterparty acting in good faith; need for speed; strong confidentiality interests; need to manage cost. Factors against: fraud or wilful misconduct; need to set a legal precedent; serious power imbalance; or a counterparty plainly uninterested in negotiating.
Build tiered Multi-Tiered Dispute Resolution (MDR) clauses — negotiation, mediation, then arbitration/litigation — into commercial contracts to preserve optionality.
Lessons from Reported Cases
A cross-border construction dispute over a coal-fired power station (claim over CNY 100 million) demonstrates the value of combined technical-and-legal mediation. With heavy technical disagreement on design and manufacture, mediators engaged a technical-appraisal institution and applied a “issue framing — appraisal — perspective swap — staged negotiation — flexible solutions” pipeline, resolving both technical and legal issues.
A Hong Kong–Xiamen footwear case shows the leverage of cross-court coordination. With two related cases in the system, the Xiamen courts collaborated and used the mediator’s communication channel to settle, with the parties even agreeing to continue cooperation.
A small-claim Tunisia quality dispute (USD 12,000) shows the value of a “cooling-off period”. After five months, the parties agreed on deposit return, discounted clearance of stock, and continued cooperation — a three-win outcome.
Practical Recommendations
Contract clauses. Add a mediation-first clause to new and renewed contracts: institution, rules and timeline. Suggested template: “Disputes arising under this Contract shall first be resolved by friendly negotiation; failing that, before commencing arbitration or litigation, the parties shall submit the dispute to [institution] for mediation, which shall be conducted within 30 days; if mediation fails, the dispute shall be submitted to arbitration/litigation.”
Choice of institution. Prefer institutions recognised by the SPC International Commercial Court (e.g. CCPIT Mediation Centre, Shanghai Commercial Mediation Centre); evaluate the mediators’ background, international exposure, historic success rates and fee transparency.
Mediator selection. Match the dispute type; for cross-border cases, consider mediators with multi-jurisdictional experience from Hong Kong, Macao or overseas.
Judicial confirmation. Apply jointly within 30 days of the agreement’s effective date to secure enforceability.
Conclusion
The Regulation marks the shift from “scattered local practice” to a unified national framework, elevating commercial mediation from a peripheral supplement to a mainstream pillar alongside litigation and arbitration. As the Singapore Convention ratification process advances and Greater Bay Area rules alignment deepens, China’s commercial mediation will enter a golden development phase. Forward-looking legal teams should integrate it into the core dispute-resolution toolkit.