ABSTRACT
Having a good arbitration system may contribute to a country's economic development. When foreign investors and merchants make international investments or conduct international transactions, they usually care about how future disputes will be resolved. Many scholars have advocated incorporating ad hoc arbitration into the Chinese arbitration system. They find China's arbitration system incomplete and support legitimizing ad hoc arbitration because of its various advantages. The Chinese government also created a new, free-standing mediation system called "People's Mediation." Under this system, many People's Mediation Commissions were created at the local level across the country. The Supreme People’s Court of China (SPC) has played a vital role in clarifying Chinese law's position on ad hoc arbitration. Full recognition of ad hoc arbitration under Chinese law means a full scale rewriting of the People’s Republic of China (PRC) Arbitration Law and amending of all the related Chinese legislation.
