What’s an arbitration agreement in written form? Is an oral arbitration agreement a valid arbitration agreement?

An arbitration agreement shall include arbitration clauses stipulated in the contracts and agreements of submission to arbitration that are concluded in other written forms before or after disputes arise. The Arbitration Law of the People's Republic of China, the New York Convention and the Civil Procedure Law of the People's Republic of China all require the arbitration agreement to be reached in written form. Therefore, the parties shall conclude the foreign-related arbitration agreements in written form, and the oral arbitration agreements reached by the parties shall have no legal effect. Written form refers to a form such as a written contractual agreement, letter, telegram, telex and fax that can tangibly express the contents contained therein, as well as electronic data text such as electronic data exchange and e-mail that can tangibly express the contents contained therein and may be picked up for reference and use at any time. Therefore, an arbitration agreement reached in the above-mentioned ways is an arbitration agreement in written form.

May the parties require the court to hear the case after an agreement on arbitration? What’s the effectiveness if the parties concerned agree that they may either resort to arbitration or bring a lawsuit to court?

If the parties only agree in the contract that the dispute in question may be brought to arbitration after the occurrence of the dispute, and if a party resorts to arbitration after the dispute has occurred, the people’s court shall not accept the case if the other party brings a lawsuit as long as a clear arbitration institution has been stipulated.

Where the parties concerned agree that they may either apply to the arbitration institution for arbitration or bring a lawsuit with people’s court for settlement of dispute, the agreement for arbitration shall be ineffective, unless after one party applies to the arbitration institution for arbitration, the other party fails to raise challenge prior to the arbitration tribunal’s first hearing. This shows that according to the Chinese law, the legal consequence of the parties effectively agreeing on arbitration is to exclude the jurisdiction of the court. Therefore, an arbitration agreement is ineffective if the parties agree that they may either apply to arbitration or litigation.

What happens if the arbitration institution agreed upon by the parties does not exist?

According to the Arbitration Law of China and relevant judicial interpretations, if the parties have agreed on an arbitration institution in the arbitration agreement, but the arbitration institution does not actually exist, with no supplementary agreement concluded, the arbitration agreement shall be deemed null and void. Where the parties agree that the dispute shall be arbitrated by a branch of an arbitration institution that does not actually exist, the people’s court shall not determine that the dispute shall be arbitrated by such arbitration institution and the arbitration agreement shall be deemed null and invalid. If an arbitration agreement contains no or unclear provisions concerning the arbitration commission, but the true intents expressed by the parties can be otherwise inferred, for example, the name of a certain arbitration institution is incorrect but it is what the parties agreed to referred to, the arbitration agreement shall be valid.

How does an arbitration institution in China apply the law in an foreign-related arbitration?

(a) The parties may select a substantive law of the arbitration in compliance with the following requirements: (1) it shall not violate the basic principles of the laws and regulations and compulsory stipulations of our country and the social public interests; (2) have a certain connection with the disputed case; (3) it shall be agreed upon by the parties and shall be in written form.

(b) If the parties concerned do not choose the applicable substantive law, the arbitral tribunal usually follows the following two methods in determining the applicable substantive law: (1) determine the substantive law according to the conflict rules. The arbitral tribunal may, in light of the actual needs of the disputed case, apply either the applicable substantive law determined by the conflict rules of the state of the place of arbitration or the most significant relationship rule to determine the applicable substantive law;(2) determine the applicable substantive law directly according to close relationship. There are two specific approaches: one is the method of comparison, that is, the arbitral tribunal directly determines the applicable substantive law by analyzing and comparing the rules of the substantive laws of the states involved in the disputed cases; the other is the method of most significant relationship, that is, the arbitral tribunal determines the applicable substantive law of the state most closely connected with the disputed case by analyzing and comparing various factors relevant to the disputed case.

(c) If the states of the parties to the dispute acceded to a common international convention or treaty, or if a bilateral treaty or agreement has been concluded between the states of the parties, such international treaty or convention may be directly applied.

How to select arbitrators for the parties concerned?

The arbitration shall be conducted in accordance with the arbitration rules of the arbitration institution in the following ways:

(a) Within the time limit specified in the acceptance notification from the arbitration commission or the Notice of Arbitration, the parties shall nominate one arbitrator from the panel of arbitrators respectively. If the parties fail to nominate an arbitrator in accordance with the aforementioned provisions, the arbitrator shall be appointed by the head of the arbitration institution.

(b) The parties shall jointly choose one arbitrator from the panel of arbitrators to be the presiding arbitrator of the arbitration tribunal within the time limit specified in the acceptance notification from the arbitration commission or the Notice of Arbitration. The parties may also nominate respectively one to three arbitrators from the panel of arbitrators as candidates for presiding arbitrators within the time limit specified in the acceptance notification from the arbitration commission or the Notice of Arbitration. Where there is one common candidate on either parties’ list of nomination, such candidate shall be the presiding arbitrator jointly nominated by both parties; where two or more candidates are the same, the head of the arbitration institution shall, taking into consideration the specific circumstances of the case, determine one of them as the presiding arbitrator. It the parties fail to nominate the presiding arbitrator jointly in accordance with the aforementioned provisions, the presiding arbitrator shall be appointed by the head of the arbitration institution.

How the foreign arbitral awards are enforced within China?

According to the provisions of Civil Procedure Law of China and relevant judicial interpretations, if an award made by a foreign arbitration institution must be recognized and executed by a people's court of the People's Republic of China, the party concerned shall directly apply to the intermediate people's court of the place where the party subject to execution is domiciled or where his property is located. The people's court shall handle the matter pursuant to international treaties concluded or acceded to by the People's Republic of China or in accordance with the principle of reciprocity. For cases relating to the effect of a maritime dispute arbitration agreement, a maritime court in the place where the arbitral institution as stipulated in the arbitration agreement is located, or where the arbitration agreement is entered into, or in the place of domicile of the applicant or the respondent, shall have jurisdiction; or in the absence of a maritime court in the aforesaid place, it shall be determined based on the jurisdiction of the nearest maritime court. If the people's court accepted the application decides to grant a recognition and enforcement, the rule shall be made within two months from the date of acceptance of the application and the enforcement shall be finished within 6 months after the ruling except in special circumstances; if it decides not to grant a recognition and enforcement, it shall submit to the higher people's court with jurisdiction for examination before it rules not to enforce or refuse to a recognition and enforcement; the higher people's court agreeing on the ruling not to enforce or refuse to a recognition and enforcement shall submit its examination opinions to the Supreme People's Court; the ruling not to enforce or refuse to a recognition and enforcement shall be made after the Supreme People's Court makes a reply.

How much do you know about the New York Convention?

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, was adopted on 10 June 1958 in New York. The Convention lays a solid foundation for the recognition and enforcement of international commercial arbitration in another country. In the absence of the limited grounds for refusal enumerated in the Convention, the courts of contracting states shall recognize and enforce the arbitral awards rendered by other states when accepting applications for recognition and enforcement. The New York Convention entered into force on 7 June 1959 and has been ratified by 172 states. Nowadays, the New York Convention has become an important document for international arbitration that “has strengthened respect for binding commitments, inspired confidence in the rule of law and ensured fair treatment in the resolution of disputes arising over contractual rights and obligations”. In 1986, the 18th session of the Standing Committee of the 6th National People's Congress determined to accede to the New York Convention. On 22 January 1987, China submitted its instruments of ratification and made two reservations: the reciprocity reservation and commercial reservation. It became effective in China on 22 April 1987.

What institutional members does the Shanghai Arbitration Association have currently?

Established in 2019, the Shanghai Arbitration Association is the first local arbitration association initiated and promoted by a provincial judicial administrative organ, which is a professionalized non-profit social organization legal person established pursuant to the law. The Shanghai Arbitration Association aims to enhance self-governance in the arbitration industry, promote exchanges, advance research, develop arbitration services and safeguard the legitimate rights and interests of its members and the order of fair competition.

The website of the Shanghai Arbitration Association is at http://sharbitration.org.cn, consisting of three institutional members for now, which are:

(1) Shanghai International Economic and Trade Arbitration Commission (Shanghai International Arbitration Center), with its website at https://www.shiac.org/pc/SHIAC.

(2) Shanghai Arbitration Commission, with its website at http://www.accsh.org/.

(3) China Maritime Arbitration Commission Shanghai Headquarters, with its website at http://www.cmac.org.cn/.

How can Shanghai promote its role as a preferred location for international commercial mediation?

As a significant means to optimize the business environment, commercial mediation serves as a “pressure relief valve” for resolving commercial disputes, a “stabilizer” for maintaining the market order, and a “soft power” for enhancing the core competitiveness of a city. Centering on the service construction of “Five Centers” and the enhancement of “Four Major Functions”, great efforts are made to cultivate a number of commercial mediation organizations with core competence and strong international reputation in the fields such as finance, science and technology innovation, shipping, intellectual property, investment, and data transfer, striving to build Shanghai into a preferred location for international commercial mediation.

(1) Institutional Guidance: Efforts will be made to launch local provisions specifically regulating international commercial mediation, iterate, optimize and perfect policy measures and build a legal ecosystem for international commercial mediation in several aspects such as guiding the establishment of international commercial mediation organization, reinforcing demonstration and guidance as well as improving self-governance in the industry. Meanwhile, commercial mediation organizations are encouraged to carry out international commercial mediation activities and enhance the international competitiveness, so as to promote the development of international commercial mediation in a market-oriented, standardized and orderly manner.

(2) Professional Cluster: Efforts will be made to cultivate specialized, large-scale and comprehensive international commercial mediation institutions with core competitiveness and strong international reputation, and to formulate international mediation rules in alignment with international common rules, through benchmarking against high-standard international economic and trade rules. Meanwhile, policy support will be offered in terms of talent gathering, attraction and cultivation, while great efforts will be spared to cultivate and introduce talents in foreign-related commercial mediation, who have an international perspective, have a good knowledge of international economic and trade rules and are equipped with professional capabilities of resolving international commercial disputes.

(3) Intelligent Engagement: Efforts will be made to innovate new models of commercial mediation services and build a digital and intelligent platform for cross-border commercial mediation. Highlighting the subjects demands and application scenario needs of international commercial mediation and carrying out the research and development and application promotion of legal technology products of “Intelligent AI+ International Commercial Mediation”, innovative solutions will be offered to efficiently handle international commercial disputes, so as to continuously improve the responsiveness, accuracy and convenience of international commercial mediation services.

What is international commercial mediation?

International commercial mediation is a non-litigation dispute resolution mechanism applicable to commercial disputes arising from(including without limitation) international trades, transportation and maritime affairs. Usually when a dispute arises, the dispute will be submitted to an international commercial mediation institution if both parties are willing to negotiate a solution, where professionals with rich experience and professional knowledge in the fields of law, international trade, commerce and other fields will act as mediators to communicate with the parties in dispute, determine the issue of the dispute on the basis of clarifying the rights and obligations of both parties, and distribute the disputable interests between the parties appropriately so as to reasonably assist the parties in reaching a settlement agreement to solve the dispute.

With its voluntariness, flexibility and confidentiality features, international commercial mediation is more flexible and efficient than traditional dispute resolution methods such as litigation and arbitration. In international commercial disputes, the ever-changing markets and the business strategies of commercial entities have prompted the subjects of the disputes to choose a more efficient way to resolve disputes, and the initiation of the mediation process, the selection of mediators and the solutions in an international commercial mediation can be customized based on the needs and specific situations of the parties for a simple, flexible and diverse mediation. Meanwhile, confidentiality is also one of the essential principles of an international commercial mediation, only the mediator and the parties in dispute will participate in the mediation process, and the disputed information and commercial secrets involved in the mediation will be kept strictly confidential.

What is the role of international commercial mediation in facilitating international trades?

Time-saving and cost-effective: International trade disputes often involve complex processes and interests of different parties, and litigation and arbitration procedures are cumbersome and time-consuming, while international commercial mediation can exactly resolve international trade disputes more efficiently. Based on the voluntary choice of the parties in dispute, the mediation procedures can be quickly launched, the mediators will quickly identify the core of the problem, and work out a solution within a relatively short period of time. A reasonable division of the interests among the parties can greatly reduce the costs of time, so that international trades can return to normal as soon as possible.

Maintaining cooperative relations: In view of the the international situation and the rise of trade protectionism, international trading partners usually prefer to maintain long-term and stable cooperation, and the settlement of disputes through a peaceful and amicable way, i.e. an international commercial mediation can minimize the damage caused by discrepancies and conflicts to the cooperative relations of the parties, and lay the foundation for the continuation of cooperation in the future.

Maintaining commercial secrets: international trades often involve the core commercial secrets and sensitive business information of enterprises. The mediation process is strictly confidential, which avoids public disclosure of such information and effectively protects the reputation and competitive advantage of enterprises.

In conclusion, international commercial mediation is an important way to resolve international trade disputes, save costs for enterprises, and solve disputes efficiently and professionally. It has literally contributed to the prosperous development of international trades.

What are the obstacles to cross-border enforcement of international commercial mediation agreements and measures to resolve them?

While international commercial mediation has the advantages of efficiency and confidentiality, there are disadvantages when it comes to the validity of the mediation agreement reached after an international commercial mediation, and the difficulty of cross-border enforcement.

At present, only the mediation agreements formed through court mediations have direct enforceability and finality in China. The nature of international commercial mediation agreements is more similar to civil contracts, which can only become judicial confirmation instruments with enforceability after being examined and confirmed by the court. The court will substantially examine the reasonableness of the international mediation agreements and determine whether they are detrimental to the interests of a third party, thus the efficiency advantage of mediation over litigation and arbitration may be greatly reduced.

The Singapore Convention on Mediation (the full name of which is the United Nations Convention on International Settlement Agreements Resulting from Mediation) is an international convention considered and adopted by the United Nations General Assembly session in December 2018 to address the cross-border enforcement of settlement agreements reached in international commercial mediations, which has already been signed by China but has not entered into force for the time being as domestic approval formalities have not been finished yet.

How to access to and inquire about the Shanghai Oriental Foreign Law Discerning Center and the Guide for Overseas Service Outlets of Shanghai Law Firms (Yellow Pages)?

(1) Please see the following ways to contact the Shanghai Oriental Foreign Law Discerning Center:

Option 1: Visit the official website of the Shanghai Oriental Foreign Law Discerning Center: http://www.ofld.com.cn/. Please click on the “Online Inquiry Application”, fill in the information as per the prompts and submit the application.

Option 2: Query via the court platform. After logging in to the Online Litigation Service Platform of Shanghai Courts: https://www.hshfy.sh.cn/, select the “Online Entrustment” at the “Shanghai International Commercial One-Stop Dispute Resolution Platform”, and submit the application to the “Shanghai Oriental Foreign Law Discerning Center” from the “Entrusted Acceptance Agencies”.

(2) Please see the following ways to inquire about the Guide for Overseas Service Outlets of Shanghai Law Firms (Yellow Pages):

Option 1: Online inquiry

Please visit the Shanghai Lawyers' Overseas Legal Service Platform, and you can search specific information on law firm branches by the country or region name in the “Guide for Overseas Service Outlets of Shanghai Law Firms (Yellow Pages)” section.

Option 2: Offline inquiry

Please visit the Shanghai Bar Association, with address at 33F 789 Zhaojiabang Rd. hanghai, and telephone number of 021-64030000.

How to deal with international trade disputes through professional mediation institutions?

Handling of international trade disputes through professional mediation institutions generally includes the following steps: firstly, selection of the mediation institution. The parties in dispute will, based on the nature of the dispute and the needs of the parties, choose an appropriate mediation institution; secondly, submission of an application for mediation. The parties in dispute will submit an application for mediation to the selected mediation center, and the application should contain a detailed explanation of the basic information of the parties, a detailed description of the dispute, the demands of both parties and the desired mediation objectives; thirdly, selection of mediators, after the mediation institution reviews and accepts the application for mediation, depending on the nature and complexity of the dispute, the two parties will mutually decide after negotiation, or the organization will designate mediators with both legal, international trade and commercial expertise and rich commercial experience, and determine the time, place and manner of the mediation meeting; fourth, mediation. The mediators will arrange a full communication and consultation between the parties, and if the parties agree on the result after mediation, they will sign a mediation agreement that can be applied for enforcement after confirmation through the court. If the mediation is unsuccessful, the parties may choose to resolve the dispute through arbitration or litigation afterward. To protect the privacy and interests of the parties, the information disclosed during the mediation process usually has no legal effect in the subsequent procedures.

Professional mediation is playing an ever-important role in international trade dispute resolution as a strong legal safeguard for enterprises’ cross-border operations.

E.   pre-event prevention and in-event control of the international trade

What are the main points to note in terms of pre-event prevention and in-event control of the international trade?

Risk management in international trade cannot be done once for all but is a dynamic and systematic process running through the full life cycle of transactions instead. International Trade Enterprises are suggested to build the first line of defense for pre-event prevention, covering credit investigation, compliance review, contract design, robust intellectual property protection, structure optimization and insurance arrangement, and construct the second barrier for in-event control, involving performance monitoring, payment management, logistics tracking, objection handling and risk early warning mechanisms. Pre-event prevention and in-event control are not separate but complementary, with thorough planning enabling prompt responses to emerging challenges. The international trade business is like a cross-border voyage, where both opportunities and risks coexist. With the establishment of a systematic risk prevention and control system, international trade enterprises would make great efforts in the two key stages, focusing on proactive pre-event prevention and responsive in-event control, (just as the best doctors can prevent diseases before they occur). This means that they are able to nip in the bud or defuse risks promptly when the risks emerge for the first time, so as to effectively safeguard stability and earnings in the international trade. Meanwhile, international trade players are recommended to seek full protection from professionals throughout the process, such as international trade lawyers.

(I) Pre-event prevention

(1) Trading Counterparty Credit Investigation: This involves verifying a counterparty’s official information (including but without limitation of registered address, registered capital, business scope, tax number and official email), assessing their operational status, performance capacity and credit record through professional agencies, and confirming the identity and authority of their agent.

(2) Overseas Laws and Country Risk Assessment: Businesses should use professional platforms to understand a target country’s trade, intellectual property, data privacy, cybersecurity, anti-monopoly, and anti-unfair competition regulations, along with its technical trade measures and rules of origin, with key steps such as promptly registering trademarks and patents abroad, creating a compliance classification system, screening for embargoed entities, and implementing measures to control compliance risks.

(3) Contract Clauses Drafting: A comprehensive international trade contract with clear rights and responsibility should be drafted, focusing on the clauses related to delivery conditions (like FOB or CIF), payment methods and terms, dynamic price adjustment mechanism, quality standards and inspection procedures, intellectual property protection, force majeure clauses, liability and scope of compensation and dispute resolution.

(4) Rational Insurance Allocation: This involves selecting basic and additional cargo insurance based on the goods’ nature, transport method, and destination risk, while adhering to specific trade terms. Simultaneously, businesses are suggested to prudently evaluate a trading partner’s creditworthiness and purchase export credit insurances to mitigate commercial and political risks so as to safeguard the business.

(II) In-event control

(1) Monitor Contract Performance: Businesses must meticulously preserve all core transaction documents, including contracts, amendments, and payment vouchers, and maintain a complete record of all written communications. Concurrently, they should utilize a logistics tracking system to monitor the real-time movement of goods and establish a process to promptly contact trading partners upon port arrival to ensure timely cargo pickup and prevent the costly issue of abandoned goods.

(2) Logistics Management: Businesses should select reliable carriers and clarify delivery and transportation responsibilities. They should cooperate with reliable freight forwarders and strengthen the management of bills of lading, preventing freight forwarders from telex release bill of loading without authorization. Also, they should be cautious with straight bills of lading, to avoid a scam where a seller fraudulently changes a consignee on a bill of lading (B/L) after shipment.

(3) Customs Clearance Management: This involves processing imported and exported goods by ensuring that accurate commodity classification and declaration information aligns with actual goods and customs requirements, in compliance with regulations. For specially regulated commodities, it is essential to obtain the required import or export licenses from relevant government agencies in advance of the shipment.

(4) Avoid Letter of Credit Risks: When using a letter of credit (LC) for settlement, it is crucial to conduct a thorough document review after receiving the LC to ensure its terms align with the underlying contract and to identify and prevent any ambiguous or problematic “soft terms” that could lead to payment refusal by the bank.

(5) Handling of Overdue Payment for Goods: It is suggested to send an immediate and polity reminder email and request a written explanation for the delay, stating a specific date and amount for the payment.

(6) Handling of Quality Objection: In the event of a quality objection, businesses should promptly collect and document all evidence related to the quality objection, and require the trading counterparty to have an independent, third-party inspection agency re-inspect the disputed goods and issue the inspection report. During the re-inspection period, businesses can require the counterparty to pay for the portion of the contract that is not in dispute, so as to reduce the overall capital recovery risk.

(7) Handling of Cargo Damage Risks: In a cargo damage dispute, businesses must promptly negotiate and take immediate steps to minimize further loss (negotiating the insurance claim or transferring the claim to a third party).

(8) Resolution of Sudden Disputes: The shipments should be suspended. The parties should set up the emergency response team without delay to promote settlement via negotiations and strive for continued cooperation.

F.   WTO and China

What’s WTO? What are the differences between WTO and GATT?

WTO is short for World Trade Organization. According to the Agreement Establishing the World Trade Organization reached in the 8th round of multilateral trade negotiations (the Uruguay Round) under the General Agreement on Tariffs and Trade (GATT), WTO came into being on 1 January 1995 with the headquarter in Geneva, and is an international organization managing the multilateral trading system.

The differences between WTO and GATT are:

(a) the nature of institution: WTO is a permanent international organization with complete qualifications as a subject of international law. GATT, however, as the predecessor of WTO, is not qualified as a subject of international law and exists as a provisional multilateral trade agreement.

(b) scope of jurisdiction: WTO covers trades in goods, services and intellectual properties related to trades and has established a more complete system of rules whereas GATT only covers trades in goods.

(c) dispute settlement: WTO adopts the principle of reverse consensus in four aspects: panel establishment, panel adoption, appellate body report and the request for trade retaliation authorization. The matter is adopted unless there is a consensus of the members against adoption. This enhances the mandatory nature of the dispute settlement mechanism and ensures the implementation of the panel report or the appellate body report. GATT, however, follows the principle of consensus, does not set a schedule for dispute settlement and the implementation of decisions is poor.

What are the main functions of WTO?

The main functions of WTO are:

(a) Primary function: to administer and manage the Agreement Establishing the World Trade Organization and multilateral trade agreements, meanwhile, to provide a framework for the implementation, administration and operation of the multilateral trade agreements;

(b) to promote negotiations of international free trade;

(c) to resolve trade disputes among member states;

(d) to monitor trade policies of member states;

(e) to cooperate with other international economic organizations such as IMF;

(f) to provide technical assistance and training to developing and least developed economies.

What are the fundamental principles of WTO?

(a) Principle of non-discrimination: comprised of most-favored-nation treatment and national treatment. Most-favored-nation treatment means the treatment granted to other members by one member in the area of trades in goods and part of services shall be no less favorable than the preferential treatment granted to any third country (whether a WTO member or not) at present or in the future. National treatment means the preferential treatment no less favorable than that of the member country’s own nationals.

(b) Principle of free trade: lower tariffs, reduce non-tariff trade barriers and expand market admission in services trade.

(c) Principle of transparency: WTO members shall publish the trade measures formulated and implemented and the changes thereof, and notify WTO and its members. Unpublished measures may not be implemented.

(d) Principle of fair competition: WTO members shall avoid to take measures that could distort market competitions and maintain an open, fair and impartial market environment.

(e) Principle of economic development: encourage economic development and reforms of the developing members, transition members and new members, and provide incentives such as special concessional arrangements, transition periods, technical support and training.

(f) Other principles include principle of proper protection, principle of stable trade development, principle of regional trade and principle of exception and exemption.

What rights and commitments does China have and make after its accession to WTO?

The rights China are entitled to include participate fully in the multilateral trading system, enjoy non-discrimination treatment and rights of developing countries, obtain a transition period to open market and adjust laws, reserve state trading mechanism, provide necessary support to domestic industries, maintain state stipulated pricing, reserve rights to collect export taxes and conduct statutory inspection to import and export commodities, and open up service trades and carry out the approval and administration thereof step by step in a planned manner.

China's WTO accession commitments include the integrity and transparency in trade policies, trade mechanism reform, opening-up of the service trades, intellectual property protection and judicial review system improvement. Take trade mechanism reform for example, it includes liberalizing the right to trade step by step, regulating state trade and stipulating trade systems, removing non-tariff measures step by step, regulating the system of licenses for the import and export of goods, promoting a market-oriented pricing mechanism, subsidy restraint measures, no export subsidy for agricultural products and implementing the Agreements on Trade-Related Investment Measures.

What are the challenges of WTO? How will China respond?

At present, the WTO multilateral trading system is in trouble, such as the collapse of the appellate body of dispute settlement mechanism, and it is difficult for members to claim for justice in international trade. There are also difficulties in reaching multilateral agreements on the function of trade negotiations.

The year 2024 marks the 23th anniversary of China’s accession to the World Trade Organization and is also a critical year for the implementation of China’s 14^th Five-Year Plan. Since its accession to WTO, China has become the world's second largest economy, making important contributions to promote global trade and sustainable economic development. China supports the WTO reform and has put forward three basic principles and five proposals to enhance the authority and effectiveness of WTO.

Within the overall framework of the multilateral trading system, free trade arrangements among members are a useful complement to and a positive driving force for the multilateral trading system. In recent years, China has accelerated the layout to participate actively in regional economic integration. For instance, on 15 November 2020, ten ASEAN countries and China, Japan, South Korea, Australia and New Zealand officially signed the Regional Comprehensive Economic Partnership (RCEP); on 16 September 2021, China officially applied to join the high standard international trade rules, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). On January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) entered into force for implementation; on June 2, 2023, with the inclusion of the Philippines, all of the 15 member states had completed the procedures for effect and implementation of RCEP. With their implementation of tariff concessions to each other, the RCEP entered a new phase of full implementation.

G.   Integrated Development of the Yangtze River Delta Serves International Trade

What are the stages of the Integrated development of the Yangtze River Delta Strategy?

(a) Policy presentation stage: On 5 November 2018, General Secretary Xi Jinping announced at the first CIIE that China will support the integrated development of the Yangtze River Delta region and make it a national strategy.

(b) Top-level design stage: In May 2019, General Secretary Xi Jinping presided over the meeting of the Political Bureau of the CPC Central Committee and deliberated the Outline of the Yangtze River Delta Regional Integrated Development Plan. The meeting noted that the integrated development of the Yangtze River Delta would play an exemplary and leading role in the region, we need to drive the development of the entire Yangtze River Economic Belt and East China and form regional clusters of high-quality development through focusing on major work of integrated and high-quality development.

(c) Phased planning implementation stage: On 13 May 2021, the Executive Committee of the Demonstration Area for the Integrated Development of the Yangtze River Delta organized a press conference for the Three-year Action Plan for the Major Construction Projects of the Demonstration Area for the Eco-friendly and Integrated Development of the Yangtze River Delta (2021-2023) (hereinafter referred to as Three-year Action Plan). The Three-year Action Plan includes the “one hall and three areas” centralized demonstration and ecological environmental protection, facility interconnection, industrial innovation and livelihood services that are classified and demonstrated in 5 major sectors and 18 major actions. On August 22, 2022, the Action Plan for Three Provinces and One City to Build the Yangtze River Delta Scientific and Technological Innovation Community (2022-2025) was released, proposing that by 2025, the innovation and origination capacity of the Yangtze River Delta Scientific and Technological Innovation Community will need to be comprehensively improved, with a number of advantageous industries accelerating their progress towards world-class clusters. A series of supportive policies will also be launched. On July 25, 2024, the Three-Year Action Plan for the Integrated Development of the Yangtze River Delta (2024-2026) was formally released, which puts forward a total of 165 key tasks in nine aspects such as strengthening cross-regional synergy in scientific and technological innovation and industrial innovation, accelerating the improvement of the institutional mechanism for integrated development, actively promoting high-level synergistic opening-up, strengthening the ecological environment and joint protection and governance, and focusing on enhancing the capacity of safe development, etc..

What are the unique advantages of the Integrated Development of the Yangtze River Delta?

(a) The Yangtze River Delta (YRD) region is the leading area of China's advanced real economy. In terms of production, gross regional production in the YRD region, which accounted for about 1/4 of the country’s economic aggregate for 6 consecutive years, reached up to RMB 3.05 trillion in 2023. In 2023, the production of new energy automobile industry in the YRD region totaled 3,417,800 units, accounting for 36.2% of the total production in China, and shipbuilding completion accounted for 73.2% of the total production in China in the first half of 2023, with the shipbuilding industry developed strongly;; in terms of companies, the number of listed companies in the YRD region accounted for 38% that of the country in 2023; in terms of trade, the total import and export value of the three provinces and one city in YRD region in 2023 amounted to RMB 15.17 trillion, which was a new record high and a 37.3% increase compared with that of five years ago. It accounted for 36.3% of the country's import and export. As the most dynamic area of China's economy, the YRD region has become the leader of China's opening to the outside world and radiation at home.

(b) The YRD region has a large and balanced economy. Jiangsu, Zhejiang and Anhui occupied 42 seats in the latest ranking of the Top 100 Counties of China. The strong county economy has laid a good foundation for regional cooperation.

(c) The YRD region possesses intensive scientific and technological innovation resources. In the Regional Science and Technology Innovation Evaluation Report in China in 2023 released by China Academy of Science and Technology for Development, Shanghai, Jiangsu and Zhejiang ranked respectively No.1, No.5 and No.6, Anhui ranked NO.9 based on the comprehensive scientific innovation index released by the Ministry of Science and Technology of China. National Innovation Ability Supervision Report on Innovation-oriented Cities in 2023 showed that 30 cities of the YRD region ranked TOP 100, including 10 YRD cities that ranked TOP 30, including Shanghai, Suzhou, Hangzhou, Hefei, Nanjing, Wuxi, Changzhou, Ningbo, Jiaxing, and Wuhu. The YRD region is playing an increasingly prominent role in leading scientific and technological development and innovation.

What is the YRD international trade “single window”?

In order to implement the decision of the national strategy of Integrated Development of the Yangtze River Delta, optimize port business environment constantly and enhance trade facilitation, Shanghai, Zhejiang, Jiangsu and Anhui signed jointly the Co-construction Cooperation Agreement on the Yangtze River Delta International Trade “Single Window”, together to build the YRD international trade “Single Window”.

Since its official launch on June 18, 2014, the Shanghai International Trade “Single Window” has become a local International Trade “Single Window” with the largest data processing capacity in the world.   It special service area of the YRD “Single Window” is based on information sharing and serves the integration of trade clearance in the Yangtze River Delta. Furnishing enterprises with real-time announcements, information and news, it has realized the functions of order tracking, release search, new manifest search, arrival search, loading condition search and tally report search; also, it actively converges the YRD “Single Window” featured application, promotes the YRD “customs clearance + logistics” one-stop network check, such as trial operation of mutual transfer of work order information with Zhejiang and Jiangsu “Single Window”, exploring a new mode of YRD “Single Window” operation and maintenance integration; it promotes cross-border trade declaration, provides trade facilitation services for ships entering and exiting ports and goods importation/exportation of   in the YRD; and it promotes the electronic release of containers, covering nearly 100 yards of YRD terminals and 900 freight forwarding enterprises.

What are the impacts and meanings of Yangshan Port in the integrated development of the Yangtze River Delta.

(a) It is favorable to push forward the respective geographical advantages of the YRD region in terms of logistics resources and information sharing and optimization. Yangshan Port has good infrastructure, a collecting and distributing corridor connected with the outside and experience in freight handling, storage, custody and multimodal transport. The port is located at the node of the logistics center, which can integrate transshipment, warehousing, manufacturing, circulation as well as the information, so as to build a comprehensive logistics service platform and expand the space of “value-added services”.

(b) It is favorable to promote the formation of emerging industries and bring along the overall development of the regional economy of the YRD region. Yangshan Port is positioned as a bonded zone, an export processing zone and a bonded logistics park. The port can make a positive effect on the different emerging industries with its different functions. It will further drive the overall economic development of the YRD region through the formation and development of the emerging industries.

(c) It is favorable to develop the advantages of tourism resources, improve ecological environment and build a “Marine Garden” of the YRD region. It will make the YRD region become a strong marine economic area with developed marine industry and unique features, and become an advanced manufacturing base and modern marine economic zone with distinctive characteristics in the YRD region.

How can Shanghai Port coordinate regional development of the river-sea through transport?

(a) Promote the resource integration of port and shipping industry, improve the integration development mechanism, create a general pattern centered around Shanghai Port and Ningbo-Zhoushan Port, with the backbone of Nanjing, Hangzhou, Suzhou, Zhenjiang, Wuhu, Nantong, Xuzhou, Wuxi, Huai’an, Lianyungang, Wenzhou, Jiaxing inland river, Huzhou, Hefei, Ma’anshan and Anqing, and the common development of other ports.

(b) Strengthen the function of international shipping hub port. Implement the Six Action Plans for the Integrated Development of the Port and Shipping in the Yangtze River Delta, promote coordinated development of the regional port and shipping. Advance railway access to the Waigaoqiao Port and put forward the development of sea-railway through transport. Promote the establishment of the comprehensive logistics service platform for the carrier river-sea through transport of the Yangtze River.

(c) In terms of deepening internal and external opening-up and inter-connection and boosting jointly a new pattern of all-round opening-up, Shanghai Port promotes the construction of customs clearance integration of the YRD ports, improves the interconnection mechanism for the data of the YRD international trade “single window”, opens the function of information search for the enterprise evaluation results of Shanghai Port and promotes to achieve the peer-to-peer data sharing of “clearance logistics” between Shanghai Port and key port of the YRD region.

What are the strategic meanings of the construction of Hongqiao International Hub for Opening Up?

On 3 March 2021, Shanghai government held a press conference in which unveiled the implementation of the Overall Plan for the Construction of Hongqiao International Hub for Opening Up. The construction of Hongqiao International Hub for Opening Up has three strategic meanings:

(a) Accelerate the concentration and improvement of the core functions of Shanghai City, thereby enhance the weight of ripple effects to the YRD region produced by Shanghai. The core functions of Shanghai City include global resource allocation function, scientific and technological innovation commencement function, leading high-end industry function and international opening-up hub function.

(b) Enhance the hub connection between Shanghai and the YRD region, and further connect closely the advantages of opening-up and the construction as a bridgehead in the Belt and Road Initiative of Shanghai with the advantages of national circulation and open economy of the YRD region, accelerate to shape a new pattern of development.

(c) Through the construction of cross-administrative region hub, aggregate the advantageous resources of Shanghai, Suzhou, Jiaxing and even that of Shanghai, Jiangsu, Zhejiang and Anhui, build a larger and stronger central hub for the accelerated establishment of a world-class industrial cluster, shape an in-depth radiate driving force, improve infrastructure connectivity, make resource factors move freely and construct and share public services jointly.

What’s the significance of Shanghai Oriental Hub’s construction to international trades?

(1)Facilitating international business exchanges

Enhancement of international cooperation and international business opportunities: convenient business exchange conditions and an efficient exchange environment, will attract more international enterprises and investors, promote cross-border cooperation and trade exchanges, bring in new international markets and business opportunities, and converge global factors for the improvement and development of a supply chain system that suits the development trend of international trades.

(2)Serving high-end international exhibition events

Promotion of exhibition economy and economic and trade activities: High-end international brand exhibitions and economic and trade activities will attract global enterprises and professionals to join and visit, which will boost the development of the exhibition economy and also promote the development of relevant economic and trades.

(3)Enhancing the quality of training services

Cultivation of internationalized talents and promotion of soft power exchanges: High-quality training services, exchange of knowledge, technologies and management experiences are conducive to cultivating more talents with international vision and ability to provide high-quality human resource support for enterprises, and enhance the core competitiveness of them, especially in the fields like large-scale medical equipment and aviation flight simulation.

(4)Perfecting supporting service measures

Facilitation of convenient trades: Improvement of supporting software and hardware facilities will reduce barriers to trade activities, simplify processes and improve overall efficiency.

Enhancement of the internationalized trade in services: Introducing high-quality service industries by expanding the scope of market access for overseas trade in services.

(5)Improving management efficiency and convenience

Improvement of the management efficiency of personnel and goods: The optimization of formalities for the entry and exit of economic and commercial personnel, the simplification of the import and export process of international goods, and the strengthening and upgrading of the capacity of logistics and information flow will greatly spur international trade, and the facilitation measures will attract more international enterprises to take advantage of the international business cooperation zones.

H.   Belt and Road Initiative

Who brought forward the Belt and Road Initiative? What does it stand for?

When Chinese President Xi Jinping visited Central Asia and Southeast Asia in September and October of 2013, he raised the initiative of jointly building the “Silk Road Economic Belt” and the “21st-Century Maritime Silk Road” and began to be referred to as the “Belt and Road Initiative”. On 28 March 2015, the National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce of the People's Republic of China, with State Council authorization, jointly issued the Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road; In May 2017, Office of the Leading Group for Promoting the Belt and Road Initiative announced Building the Belt and Road: Concept, Practice and China’s Contribution. In these years, over 100 countries and international organizations have responded and supported in this initiative. Resolutions passed by the UN General Assembly and Security Council contain reference to it on many occasions. The vision of the Belt and Road Initiative is becoming a reality. The Belt and Road Initiative is becoming the broadest platform for international cooperation in keeping with the trend of economic globalization and to the greater benefit of all our peoples.

The Belt and Road Initiative is short for the “Silk Road Economic Belt” and the “21st-Century Maritime Silk Road”.

What are the five principles of jointly building the Belt and Road Initiative?

(a) The Belt and Road Initiative is in line with the purposes and principles of the UN Charter. It upholds the Five Principles of Peaceful Coexistence: mutual respect for each other's sovereignty and territorial integrity, mutual non-aggression, mutual non-interference in each other's internal affairs, peaceful coexistence, and equality and mutual benefit.

(b) The Initiative is open for cooperation. It covers, but is not limited to, the area of the ancient Silk Road. It is open to all countries, and international and regional organizations for engagement, so that the results of the concerted efforts will benefit wider areas.

(c) The Initiative is harmonious and inclusive. It advocates tolerance among civilizations, respects the paths and modes of development chosen by different countries, and supports dialogues among different civilizations on the principles of seeking common ground while shelving differences and drawing on each other's strengths, so that all countries can coexist in peace for common prosperity.

(d) The Initiative follows market operation. It will abide by market rules and international norms, give play to the decisive role of the market in resource allocation and the primary role of enterprises, and let the governments perform their due functions.

(e) The Initiative seeks mutual benefit. It accommodates the interests and concerns of all parties involved, and seeks a conjunction of interests and the “biggest common denominator” for cooperation so as to give full play to the wisdom and creativity, strengths and potentials of all parties.

What are the cooperation priorities of the Belt and Road Initiative?

The “Belt and Road Initiative” should promote policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds as major goals.

Policy coordination: We should promote intergovernmental cooperation, build a multilevel intergovernmental macro policy exchange and communication mechanism, expand shared interests, enhance mutual political trust, and reach new cooperation consensus.

Facilities connectivity: On the basis of respecting each other's sovereignty and security concerns, countries along the Belt and Road should improve the connectivity of their infrastructure construction plans and technical standard systems, jointly push forward the construction of international trunk passageways, and form an infrastructure network connecting all subregions in Asia, and between Asia, Europe and Africa step by step.

Unimpeded trade: We should strive to improve investment and trade facilitation, and remove investment and trade barriers for the creation of a sound business environment within the region and in all related countries. We will discuss with countries and regions along the Belt and Road on opening free trade zones so as to unleash the potential for expanded cooperation.

Financial integration: We should deepen financial cooperation, and make more efforts in building a currency stability system, investment and financing system and credit information system in Asia.

People-to-people bond: We should carry forward the spirit of friendly cooperation of the Silk Road by promoting extensive cultural and academic exchanges, personnel exchanges and cooperation, media cooperation, youth and women exchanges and volunteer services, so as to win public support for deepening bilateral and multilateral cooperation.

What are the areas of cooperation of the Belt and Road Initiative?

Promoting connectivity of infrastructure and facilities: Boosting infrastructure development to enhance transnational and cross-regional connectivity is a priority area

for cooperation.

Enhancing economic and trade cooperation: China attaches importance to furthering such ties to bring benefits to all, and building a more balanced, equal and sustainable trade system.

Expanding production capacity and investment cooperation: Cooperation in production capacity and equipment manufacturing and mutual investment are two more priority areas of cooperation among the Belt &Road countries.

Expanding financial cooperation: Further cooperation in finance, unimpeded currency circulation, and stronger financing will create a stable financial environment for the Belt and Road Initiative. This will play a positive role in guiding various sources of capital to engage in developing the real economy, in value chain creation, and in promoting the healthy growth of the global economy.

Strengthening cooperation on ecological and environmental protection: China is committed to building a green Silk Road. It applies a green development philosophy to B&R cooperation activities, shares China’s newest ideas, technologies, and practices in the areas of ecological progress, environmental protection, pollution prevention and control, ecological restoration, and circular economy, and actively fulfills its responsibilities on critical issues such as climate change.

Promoting orderly maritime cooperation: The building of the 21st-Century Maritime Silk Road relies on maritime cooperation – the development of maritime trade, economy and connectivity, the building of a number of ports, and the maintenance of a safe and smooth sea passage.

Strengthening cooperation and exchanges in cultural, social and other fields: The Belt and Road, which would have been impossible without the concerted efforts of people from all participating countries, will bring opportunities for trade, tourism, cultural and educational exchanges, and ensure friendly relationships between the countries.