China signed a convention on Friday establishing the International Organization for Mediation in Hong Kong, with representatives from more than 30 countries joining as founding members. Reuters reported that Chinese Foreign Minister Wang Yi presided over the ceremony at the Grand Hyatt hotel in Wan Chai. The new body aims to be on par with the International Court of Justice and will handle disputes between countries, between nations and private entities, and between international organizations.

The International Organization for Mediation (IOMed) represents the first intergovernmental body dedicated exclusively to mediation. Countries including Pakistan, Indonesia, Belarus, Cuba, Serbia, Algeria, and Sudan signed the founding convention. The organization will operate from headquarters currently under renovation at the former Wan Chai Police Station, with operations expected to begin by late 2025 or early 2026.

Global Context and Rising Mediation Demand

Mediation has emerged as a preferred method for resolving international disputes due to rising costs and delays in traditional litigation. JAMS data shows international dispute resolution cases increased 7% in 2023, reaching 19,464 new cases globally. The organization noted that global supply chain disruptions and political uncertainty have driven demand for neutral alternative dispute resolution processes.

Hong Kong's positioning as a mediation center builds on its existing reputation in arbitration. According to the Queen Mary University of London's 2021 survey, Hong Kong ranks third globally as the most preferred location for arbitration after London and Singapore. The city handled 344 arbitration cases in 2024, representing a 24% increase from the previous year.

The Singapore International Dispute Resolution Academy reported in 2024 that international commercial mediation achieved the highest satisfaction levels among all dispute resolution mechanisms. SMU's survey found growing interest in hybrid dispute resolution procedures for investor-state disputes, reflecting broader trends toward flexible resolution methods.

Strategic Implications for China's Global Influence

The mediation body represents part of China's broader strategy to expand its role in global governance structures. The initiative aligns with Beijing's Belt and Road Initiative, which has attracted participation from over 150 countries since 2013. Council on Foreign Relations analysis describes the BRI as one of the main planks of China's assertive international strategy under President Xi Jinping.

Financial Secretary Paul Chan wrote that the mediation organization would facilitate cooperation among Belt and Road members and consolidate Hong Kong's position as an international trading hub. The timing coincides with heightened geopolitical tensions exacerbated by U.S. President Donald Trump's trade policies and global economic uncertainties.

Alicia Garcia-Herreo, chief Asia Pacific economist at Natixis, expressed cautious optimism about the initiative while noting previous challenges with arbitration centers in Chinese cities like Xi'an and Shenzhen. She suggested borrowers with Belt and Road contracts might feel less protected under current circumstances, despite Hong Kong's alternative positioning.

Justice Secretary Paul Lam said the new body would help Hong Kong address challenges from "hostile external forces attempting to de-internationalize and de-functionalize" the city. The statement references ongoing concerns about Hong Kong's international standing following the 2020 national security law implementation.

Economic Benefits and Market Impact

Chief Executive John Lee said the mediation body would bring substantial economic benefits to Hong Kong, including job creation for mediators, translators, and researchers. The organization is expected to elevate Hong Kong's international status and global influence in dispute resolution services.

The initiative comes as Hong Kong competes with Singapore for regional arbitration supremacy. Both jurisdictions permit conditional fee agreements and third-party funding for arbitration proceedings. However, Hong Kong offers unique advantages through its Arrangement Concerning Mutual Assistance in Court-Ordered Interim Measures, allowing parties in Hong Kong-seated arbitrations to seek interim relief directly from Mainland China courts.

Deputy Secretary for Justice Horace Cheung said the headquarters could open by end-2025 or early 2026. The renovated facility will house operations designed to handle multiple types of international disputes through consensual mediation processes.

Unlike arbitration, mediation remains entirely voluntary, with parties free to reject proposed solutions. This flexibility appeals to countries seeking alternatives to binding legal proceedings while maintaining sovereignty over dispute outcomes.

The mediation organization also serves China's diplomatic objectives in strengthening relationships with Global South countries, many of which signed the founding convention. The initiative positions China as a provider of international public goods while potentially reducing reliance on Western-dominated institutions.

Related Reading on Morrow Report

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